Analyst Brian Yarbrough of financial services firm Edward Jones described the results as a "mixed bag" for Walmart, which faces pressure as it lowers prices, invests in technology and builds its online business to compete with Amazon.com. We made good progress this past year to save busy families time and money, and we'll do more. Even without the one-time restructuring charges, Walmart said its operating income would have fallen, by less than 1 percent. Walmart prepared for the holidays by stocking up on items it predicted would be big sellers, such as electronics, toys, and gifts - but that "harmed our basic in-stock on more everyday items, and our basic in-stock for e-commerce suffered as a result", said McMillon. Creativity, decisiveness and speed are priorities. For the upcoming fiscal year, the company projects comp growth of 2%, e-commerce growth of 40% and earnings per share of up to $5.
Walmart now plans to reduce marketing spending at Jet.com, which focuses on higher-income, millennial customers. Walmart's e-commerce increase for the full year, 44%, was also impressive.
The nation's largest retailer has been making tremendous gains in online sales, but those still represent only a fraction of its $500 billion in annual sales. "We're expanding online grocery in the U.S. and around the world and broadening our delivery capabilities in the U.S., China and other worldwide markets", McMillon said. He also said he expects the company's e-commerce losses to be "about the same level" as a year ago. Nonetheless, Walmart stock dropped 7.02% in premarket trading Tuesday on worries about profit and e-commerce slowdowns.
However, US store sales grew 2.6 percent, above expectations and marking three consecutive years of US growth - an achievement in the current climate that no other US retailer can lay claim to, says Reuters. Walmart's previous tax rate was 32.5 percent. Traffic in stores also increased for the 13th straight quarter. The biggest driver of the top line increase was Walmart U.S., which saw sales increase 3.4% to $86.6 billion.
"The wound was a little self-inflicted in that they said they were going to draw down a little bit this quarter because they needed to do some technology".
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With regards to revenues Walmart is expected to increase sales from last year to reach a figure of $134.9 billion compared to last year's $130.9 billion per the FactSet consensus.
Asda, Walmart's United Kingdom supermarket, reported a 0.5% rise in like-for-like sales - its third consecutive quarter of sales growth.
The slow growth over the holiday season comes more than a year after Walmart acquired Jet.com for $3 billion as a part of its expansion into e-commerce and a refined strategy to appeal to higher-income, urban consumers. Neil Saunders, Managing Director of retail consultancy GlobalData, wrote in a note to investors, "There are many demographics, especially younger and professional segments, for whom Walmart is not the destination of choice online.This isn't because it doesn't sell what they want". The company had Year Ago Sales of 130.94 Billion. Sam's Club reported same store sales growth of 2.4 percent, driven by a 4.3 percent increase in traffic growth.
For fiscal year 2019, Walmart forecasts an EPS of $4.75 to $5.00 on an estimated same store sales growth of 2 percent in U.S. Walmart locations.