Walmart's Revenue Rises, but Profit Falls Amid E-Commerce Push

Its shares tumbled 10 percent.

Bentonville, Ark. -based Walmart operates more than 11,700 stores under 59 banners in 28 countries and ecommerce websites, employing about 2.3 million associates worldwide. Walmart Inc. (NYSE:WMT) has risen 13.83% since February 21, 2017 and is uptrending. First National Bank of Mount Dora Trust Investment Services now owns 40,725 shares of the retailer's stock worth $4,022,000 after purchasing an additional 5,599 shares during the period.

Walmart shares sank in the US Tuesday trading session, after the retailer reported disappointing online sales over the Christmas period.

In other news, insider Jeffrey J. Gearhart sold 10,090 shares of Wal-Mart Stores stock in a transaction dated Wednesday, November 29th. "But there's a lot of questions today". I think it's a question of pace. It was the largest single-day drop since October 2015. Since then, Walmart is starting to shift marketing spend on the millennial-centric upstart to reach younger shoppers directly via Walmart.com, the company explained Tuesday.

Walmart does not report its actual e-commerce merchandise sales.

The company's CEO and President Doug McMillion noted that "We have good momentum in the business with solid sales growth across Walmart U.S., Sam's Club and global". In the past few years, the American company invested a lot to expand its online division, including thanks to online retailer Jet.com acquisition. Comp sales growth for the 52-week period ending January 25, 2019 are expected to be: Walmart U.S. "When you buy an existing company, there are going to be changes as you integrate them into the business and there's going to be hiccups periodically". It is still falling further behind, because, as previously noted, Amazon's e-commerce sales were always an order of magnitude bigger. The company increased seasonal inventory for items such as toys and electronics but ended up out of stock on staples and "more everyday items". McMillon said on the call that Walmart is still a "really well-known brand for value" in middle American places like Oklahoma, while Jet plays well with urban millennial and higher income customers in places like the New York City metro area.

In what had been a rapid-growing online business, the retail giant reports having suffered a sharp slowdown, as logistical issues compounded competitive pressure.

The company is battling for sales in a rapidly shifting retail landscape. Comparable sales are seen rising 2% in the US this year.

Going into Walmart Inc. The decision will temporarily slow sales growth at Jet.com.

"We're making real progress putting our unique assets to work to serve customers in all the ways they want to shop", McMillon said.

Some buy side analysts are also providing their Analysis on Wal-Mart Stores Inc., where 1 analysts have rated the stock as Strong buy, 0 analysts have given a Buy signal, 6 said it's a HOLD, and 1 analysts rated the stock as Sell. The big-box retailer, which has been positioning itself to compete against Amazon, reported online growth of 23 percent for the quarter, which was down from 50 percent in the third.

"They're doing well", Yarbrough said.

The downside to the numbers comes from the bottom line, where net income slumped by just over 42%. "Those competitive pressures are not going to alleviate". As part of that effort, Walmart is converting a Sam's Club store in Memphis into a e-commerce distribution center, and it revealed plans to open more around the country in the coming year. The rate of same-stores sales growth is expected to hit 2.1%.

Those expectations took it on the chin when Walmart reported e-commerce gains in the fourth quarter of 23% year over year, the lowest increase seen in over a year. The full-year figure was $500.3 billion, an increase of $14.5 billion, or 3%.

In related news, major shareholder Alice L. Walton sold 2,057,004 shares of the stock in a transaction that occurred on Tuesday, November 28th.

Walmart projects earnings of $4.75 to $5 per share for the current fiscal year, which is lower than some investors anticipated. Analysts expected revenue of $134.91 billion, for the quarter.

  • Joey Payne