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Walmart Reports Drop in Online Sales Growth
Last year, Walmart brought in half a trillion dollars. Yet its latest figures are still causing unease for analysts, shareholders and consumers alike.
In February, Walmart reported quarterly profits below industry expectations and a sharp dip in online sales growth. This quarter comes during the critical holiday period where many in e-commerce have experienced encouraging results. Walmart stock dropped 7.02 percent in premarket trading as a result.
Walmart’s sales grew 23 percent in the holiday quarter compared to 50 percent in the previous quarter. It cited operational problems related to inventory replenishment that affected sales growth as well as a planned slow-down as it invested in long term business growth.
Earnings came to $1.33 per share in the fourth quarter ending 31 January 2018 (short of the average analyst estimate which was $1.37 per share). The company has forecast earnings of $4.75 to $5 per share for the current fiscal year on an increase of 2 percent in U.S. same-store sales. Walmart also expects U.S. e-commerce growth for the fiscal year to be around 40 percent.
While there was a steep premarket drop in shares as a result of the announcement, there are differing views about what these latest results mean. Many analysts have been quite vocal in relation to Walmart’s seemingly weak profit numbers and e-commerce slow down. But others see the fourth quarter performance as respectable and part of a bigger picture related to focusing on online sales growth.
The next quarter will be an interesting one for Walmart, post-holiday figures and market unease. The impact of another quarter of less than encouraging results will not just impact Walmart but will no doubt have a ripple effect across the board when it comes to consumer confidence and the strength of online retail.