Wal-Mart expects its online sales to jump 40% next year
Wal-Mart Stores Inc. is all about online, anticipating that digital sales next fiscal year will rise about 40% and that it will double the number of U.S. curbside locations for online grocery shoppers at its stores.
But the world’s largest retailer continues to scale back new store growth in the U.S., with plans to open only 25 in its fiscal year 2019, which ends in January 2019. That compares with opening 230 U.S. stores during fiscal 2016.
The retail behemoth is predicting net sales growth at or above 3%, driven by online sales and growth from existing stores for the next fiscal year.
The company reiterated its per-share earnings guidance for next year and launched a two-year, $20-billion share repurchase program.
Wal-Mart shares rose $3.60, or 4.5%, to $84.13 on the news Tuesday.
“No doubt we are in a transformational period of history,” Wal-Mart Chief Executive Doug McMillon said in an address to investors at an annual meeting in Bentonville, Ark. “Our future is looking more digital.”
The retailer has been armoring up online — with a variety of e-commerce-friendly acquisitions and policies — to take on Amazon.com Inc. and more traditional rivals, such as Target Corp.
Moody’s lead retail analyst Charlie O’Shea said Wal-Mart is giving shoppers a “compelling online alternative to Amazon” and views its online sales forecast as an “impressive goal, especially on the heels of the 30% [growth] outlined at the 2016 investor meeting, which at the time seemed aspirational.”
Wal-Mart has increasingly linked its massive fleet of stores with online services, but the emphasis on expanding the number of stores it runs, at least in the near future, has ebbed. Wal-Mart expects to open fewer than 15 Supercenters and fewer than 10 Neighborhood Markets in the U.S. next year. It opened 40 new Supercenters this year, down from 60 Supercenter openings last fiscal year.
“The redeployment of significant capital expenditure dollars from new stores in the U.S. to online improvements and store remodels, especially the 1,000 store increase in in-store grocery pick-up locations, will help Wal-Mart maintain its market-leading position in the U.S. grocery segment,” O’Shea said.
