Walmart Inc. (WMT, Financial) reported its fourth-quarter financial results before the market opened on Feb. 19.
The retailer's holiday quarter saw earnings and revenue top estimates as "a favorable economic environment" helped the company grow its sales and grab a substantial market share from its competitors.Ă‚
"Progress on initiatives to accelerate growth, along with a favorable economic environment, helped us deliver strong comp sales and gain market share," CEO Doug McMillon said. "We're excited about the work we're doing to reach customers in a more digitally-connected way. Our commitment to the customer is clear — we'll be there when, where and how they want to shop and deliver new, convenient experiences that are uniquely Walmart,”
Revenue and earnings
The retail giant posted earnings of $1.41 per share for the quarter. Revenue came in at $138.8 billion, slightly ahead of analysts’ expectations of $138.65 billion.
Online sales soar
Online sales rose 43% during the quarter, beating Walmart’s annual online sales growth target of 40%. The company’s online sales are flourishing because it invested in adding products like celebrity-inspired apparel and high-end camping gear to its website. In addition, the company bought online brands like Art.com and lingerie retailer Bare Necessities to step up its game in the space. The retailer promises to keep updating its website and revamping its e-commerce experience by adding new technologies.
Segment performance
In the U.S., Walmart recorded net sales growth of 4.6% to $90.5 billion. Comps surged 4.2% in the reported quarter versus an estimated growth of 3.2%. Operating income climbed 7.3% to $5 billion.
In the international market, sales decreased 2.3% to $32.3 billion. Furthermore, operating income stood at $1.2 billion, down 9.9% year over year. Regardless, the company registered positive comps in key markets like Mexico, Canada and the U.K.
Sales at Sam’s Club decreased 3.7% from the year-ago quarter to $14.9 billion. Comps, excluding fuel, climbed 3.3%. While traffic did increase 6.4%, tickets plunged 3.1%. Operating income was $0.4 billion.
Outlook
Walmart projects net sales growth of 3% for fiscal 2020, owing to deconsolidation of its Brazilian operations as well as reduced tobacco sales at Sam’s Club. On the flip side, the company sees U.S. comps growth of around 2.5% to 3% for the year.
For fiscal 2020, the retail behemoth is forecasting 35% e-commerce growth.
In 2019, the company will put its money toward store restructuring and remodelling, e-commerce initiatives and strengthening its supply chain.
Disclosure: I do not hold any positions in the stocks mentioned.
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