Walmart sees sales rise at stores and online
Walmart raised its financial outlook for the year after beating Wall Street's expectations for the quarter and seeing the strongest growth in more than a decade in sales at established stores.
The upbeat report indicates that Walmart's efforts to improve the experience shoppers have at its stores and expand its online services, particularly in grocery, are helping bring people to its websites and stores.
Like many other retailers, Walmart is also benefiting from a stronger job market and rising confidence. Home Depot and Macy's both raised their forecasts this week.
Walmart said sales were strong across many categories but the grocery business was notable, with sales rising the most in nine years, fuelled by fresh items like meat and produce. That helped sales at stores open at least a year rise 4.5 per cent at Walmart's US division, better than analysts expected. The measure, an indicator of a retailer's health, was helped by a more than two per cent increase in customer traffic and in transactions.
Since buying Jet.com for more than US$3 billion two years ago, Walmart has been bolstering its online business by acquiring brands like Bonobos and ModCloth. It's also working to speed up delivery to compete better with Amazon, and is expanding same-day grocery delivery.
Walmart is also revamping its website with a focus on fashion and home furnishings. It has teamed up with Lord & Taylor to offer the department store dedicated space on its site. The company said the grocery pickup service for online shoppers, at more than 1,800 stores so far, is helping attract new customers and existing ones are adding an extra item in their cart.
Those kinds of moves helped drive a 40 per cent increase in online sales in the US for the latest quarter. That was up from a 33 per cent increase the previous period, after a dramatic growth slowdown in the critical fourth quarter.
But international investments hurt results in the latest quarter. The Bentonville, Arkansas-based retailer lost US$861 million, or 29 cents per share. It was affected by its investment in online retailer JD.com and a loss on selling a majority stake in Walmart Brazil. Adjusted for one-time costs, it earned US$1.29 per share, easily topping Wall Street projections, according to Zacks Investment Research.
Revenue came to US$128.03 billion, also beating projections. Walmart now expects earnings for the current fiscal year of US$4.90 to US$5.05 per share, excluding charges related to Flipkart. Analysts expected US$4.78 per share, according to FactSet.