Wal-Mart's Stock Plunges On Slower E-Commerce Growth In Q4


In the company's fourth-quarter report published on February 20, Walmart revealed that it had missed earnings expectations for the quarter, earning $2.17 billion as compared to $3.75 billion earnings from the same quarter a year ago. The company reported that in the quarter, e-commerce sales at Walmart U.S. increased 23% year-over-year, while gross merchandise volume grew 24%.

The S&P 500 notched its biggest weekly percentage gain in five years last week, as equities quickly bounced from a sharp drop off its January 26 high and eased concerns a longer selloff was at hand.

The company, which had not missed on quarterly earnings In 10 previous quarters surprised many analysts and investors.

Total revenue increased 4.1 percent to $136.3 billion, beating analysts' estimates of $134.9 billion. But McMillon noted that e-Commerce sales were depressed due to some operational issues. The Monthly and Yearly performances are -10.02 percent and 35.66 percent respectively.

We're confident in our strategy to transform the company, and we continue to be guided by four key objectives: make every day easier for busy families, change how we work, deliver results and operate with discipline and be the most trusted retailer.

Therefore, expanding into new e-commerce markets can be key to Walmart's future, but availing of the massive, lip-smacking $366 billion opportunity in China is not really an option - since Chinese companies like Alibaba, Tmall, and Taobao (launched by entrepreneur Jack Ma), along with Tencent and JD have obliterated all other competition and reduced Amazon, at around 1 percent of the market, into a virtual non-player. Livforsakringsbolaget Skandia Omsesidigt's holdings in Wal-Mart Stores were worth $12,258,000 at the end of the most recent quarter. "So you can build on that to build a strong food e-commerce business, and that's what we're doing".

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Several other institutional investors and hedge funds have also recently modified their holdings of the company.

Walmart also announced the closing of 10% of Sam's Clubs in the USA earlier in 2018 and has slowed down its openings of new Walmart locations to focus on the growth of e-commerce. During the same quarter last year, the firm earned $1.30 EPS. equities analysts expect that Wal-Mart Stores will post 4.44 earnings per share for the current fiscal year.

Wall Street was mixed, as a slide in Walmart shares weighed on the Dow, while US Treasuries slid amid this week's flood of government debt auctions. And Walmart, which has always been stymied entry into Indian offline retail by the country's byzantine rules that govern retail trade, may have to compromise by settling for a much lower stake for now in return for a ticket to play.

The company is battling for sales in a rapidly shifting retail landscape. Sales via Jet.com, which Walmart bought 17 months ago for $3.3 billion, accounted for the decreased ecommerce growth. Creativity, decisiveness and speed are priorities. Ajo Lp who had been investing in Wal for a number of months, seems to be less bullish one the $272.91B market cap company. This is a tough nut for Walmart to crack, and one that it can only break by more heavily marketing its services and proposition.

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