BENTONVILLE, AR - Proving, once again, that it is a bona fide retail giant, Walmart has reported exceptional fourth quarter results, thanks, in part, to a lucrative holiday season. With earnings and shares jumping, the retailer shows that it has what it takes to go after mega e-tailer Amazon.
While other retailers saw a slumped December, Walmart had its best holiday season in a decade, with sales at U.S. stores growing over 4.2 percent compared to last year, which includes a 43 percent rise in digital sales and a three percent jump in stock prices as of Tuesday, CNN reports.
"We had a good year, and I want to thank our associates for their great work and openness to change. They continue to inspire us as we strive to serve our customers better every day,” said President and CEO Doug McMillon in a press release. “Progress on initiatives to accelerate growth, along with a favorable economic environment, helped us deliver strong comp sales and gain market share. 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."
A report released by Walmart further details its revenue increase:
- Total 4Q revenue was $138.8 billion, an increase of $2.5 billion, or 1.9%. Total revenue was $140.5 billion (exluding currency), an increase of $4.2 billion, or 3%
- U.S. comp sales on a two-year stack of 6.8%, strongest growth in 9 years
- eCommerce sales increased by 40%
- $27.8 billion generated in operating cash flow and returned $13.5 billion to shareholders through dividends and share repurchases
Possible causes of the increase in sales include low unemployment and rising wages, low gas prices, and bringing in new high-end brands like Bonobos and Modcloth, according to CNN. Some analysts attribute the strong financial results to an opening in the toy market after the closing of longtime toy retailer, Toys “R” Us, as reported by Bloomberg.
It should be noted, however, that other analysts have considered timing to be a major factor—early SNAP benefits increased U.S. same-store sales by 0.4 percentage points. And, higher prices, more so than increased foot traffic, led to the increased earnings, according to Bloomberg.
Walmart is currently focused on expanding its online presence rather than its brick-and-mortar locations, with plans to open only ten new stores in 2019. It should be noted, however, that its physical presence will not be lost as, according to CNN, the retailer operates over 4,700 locations, and more than 90 percent of the country lives within ten miles of a Walmart store.
Will this strong fourth quarter and online expansion put Walmart on the path to e-dominance? Keep reading AndNowUKnow for important updates.
