Updated February 20th 4:47pm EST
Walmart Inc. hit an e-commerce milestone this year, making headlines as the retail giant beat fourth-quarter revenue estimates.
The brick-and-mortar giant saw its e-commerce sales rise 23% last year, topping $100 billion for the first time. This puts Walmart ahead of Amazon, but Amazon still has a significant lead, with product sales increasing 5.3% to $255.9 billion last year.
But entering a new territory with nine-digit sales will give Walmart new leverage as it chases Amazon and pursues its own growth.
“The increased scale has been a huge help,” President and CEO Doug McMillon said on a conference call with analysts.
Walmart has an omnichannel, brick-and-click plan to reach shoppers, with store renovations to organize shopper presentation on the front end and supply chain to expedite delivery on the back end. do.
Now it's important to bring everything together on a massive scale.
“We're in execution mode,” McMillon said. “We are confident in our ability to grow because we are in a position to provide the services that our customers and members want. We can provide value, we can provide convenience. And down the supply chain, we are confident in our ability to grow. We are changing to become more intelligent, more connected and more automated, which will help us execute better.”
And Walmart is further increasing its technological capabilities, unveiling a deal Tuesday to acquire connected home and television company Vizio for $2.3 billion, solidifying its growth even as sales trends moderate over the coming year. I'm trying to.
Adjusted earnings, which take into account gains from Walmart's own investments, came to $1.80 per share in the fourth quarter, beating analysts' estimates of $1.64 by 16 cents, according to FactSet. Still, net income fell 12.4% to $5.5 billion.
Investors approved Walmart stock on Tuesday, trading up 3.2% at $175.86.
Walmart isn't yet profitable in e-commerce, but it's getting closer.
The company plans for online product sales to eventually become profitable, but first with the help of ancillary businesses such as providing advertising to brands selling on online marketplaces and expanding fulfillment services. aiming to achieve the goal.
Revenue for the quarter ended Jan. 26 rose 5.7% to $173.4 billion, with e-commerce sales up 23% and the company's advertising business, which has been hailed as a growth center, up 33%.
Like-for-like sales at Walmart's U.S. operations rose 4%, with the company citing strong performance in grocery and health and wellness, offset by “weakness in general merchandise.”
Due to deflation and price declines, household goods, seasonal products, toys, and other items were weak, and overall general merchandise sales fell in the low single digits.
“Our general merchandise prices are lower in some categories than they were a year ago, or even two years ago. ,” McMillon said.
Despite the decline in sales, the increase in fashion, home and hardline sales reflects a growing market share and some newcomers shopping at Walmart, including households with annual incomes of $100,000 or more. It shows.
Excluding the fuel business, the number of transactions recorded by Walmart US increased by 4.3%, but the average ticket price decreased by 0.3%.
John Farner, CEO and President of Walmart US, said: We're seeing them more frequently and we're getting a lot of new customers…The average weekly customer count in e-commerce has increased by 17%, which is a strong number. More and more customers are using same-day and express delivery services, and this is across a wide range of categories.
“A short last mile is a key factor in e-commerce, and the ability for stores to deliver what traditionally would have been e-commerce orders, food delivery orders, or a combination of both is an important factor in e-commerce. It really helps brands,” Furner said. He said.
For the full year, Walmart's overall revenue rose 6% to $648.1 billion. The retail giant expects sales to continue to grow this year, albeit at a slower pace, with net sales expected to increase 3% to 4% this year.
Walmart reached its size through years and decades of steady growth, but in recent years, with a new focus on e-commerce and automation, and an agile positioning that drives new ideas more than ever before, You are acquiring a new profile. .
Mr McMillon said: “We already offer express delivery in the US, allowing customers to get their orders delivered quickly. But what if you need something even faster? A pot of chili on the stove And you realize you forgot the chili seasoning. Drone delivery can be there in under 15 minutes. Drone delivery is nothing new to us. Over the past two years, we've delivered 37 orders across seven states. We have completed 20,000 deliveries and are on track to reach approximately 75 percent of Dallas-Fort Worth households by the end of the year.”
Maybe this is how Walmart captures its next $650 billion in sales?
