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Walmart upbeat on outlook as sales global growth continues
WASHINGTON, Nov 16, 2018 (BSS/AFP) – Global retail giant Walmart is more
upbeat about earnings for the year, despite tamping down expectations just a
month ago, after posting sales growth across all its business lines and most
regions on Thursday.
The company has been buffeted by investments and sell-offs as it tries to
position the chain to compete in the changing and competitive retail and e-
commerce sector.
“Each of our segments achieved solid sales growth,” Walmart chief Doug
McMillon said.
Just a month ago the retailer trimmed its profit forecast for the year but
with improving sales and increased traffic in its stores the company said
total revenue had jumped 1.4 percent in the third quarter to $124.9 billion.
At the same time, the key metric of comparable store sales — those at
existing outlets rather than new stores — rose 3.4 percent in the United
States, as customer traffic rose 1.2 percent in the three months ended
October 26.
“Overall, we’re encouraged by the momentum in our business and excited to
be in a strong position to invest for the future as prior investments pay
back,” McMillon said in a statement.
The solid sales growth pushed the closely-watched earnings per share
measure to $1.08 in the latest quarter, beating expectations.
And the company raised its estimate of fiscal year 2019 earnings per share
by 10 cents to $4.85, just a few weeks after lowering the estimate following
the acquisition of India’s online retailer Flipkart.
Company executives said the investment, like others in e-commerce, home
grocery delivery and curbside pickup, had been key to keeping the store
competitive.
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– International sales growth –
The chain now has 2,100 grocery pickup locations and is increasing
delivery options so that “by the end of the year we’ll cover about 40 percent
of the population with delivery through about 800 stores.”
In addition, the chain saw sales growth “in nine of our 10 markets,
including our four largest markets: Mexico, China, Canada and UK,” according
to the statement.
Walmex in Mexico led the way with an increase of 5.4 percent in the
quarter, while sales in China rose 2.2 percent.
However, investors seemed unimpressed and Walmart shares retreated two
percent by the close making it one of the biggest losers in the benchmark Dow
Jones Industrial Average.
Chief Financial Officer Brett Biggs told reporters the US-China trade
tensions with steep tariffs on $250 billion in Chinese goods is something the
firm “will manage through,” regardless of what happens.
Biggs said the prospect that US tariffs on Chinese goods will increase in
January to 25 percent was “not positive,” since prices would go up, and the
chain would prefer to see a resolution.
But he noted consumers continued to be in “good shape” going into the
holiday shopping season.
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