Leading into the holiday season as the retailer who has turned Black Friday into a five-day event, Walmart’s third-quarter earnings showed the world’s largest retailer posted its first sales growth for the first time in nearly two years, led in large part by growth in its global E-commerce market.
Despite the small sales growth and expected uptick in E-commerce sales — which increased approximately 21 percent in its global market — Walmart’s CEO Greg Foran gave a realistic outlook Thursday (Nov. 13) about the company’s earnings and challenges ahead, particularly looking at what he called a “highly competitive” holiday season.
“Over all, I would characterize the quarter’s sales performance as mixed,” Foran said in a earnings call transcript provided by Walmart to The New York Times. “As we enter the fourth quarter, we see both opportunities and challenges ahead of us.”
One of those challenges is with its brick and mortar focus shift. Walmart has scaled back opening more stores and focused on its online efforts, Foran said, but this has helped global sales increase 21 percent. He said Walmart has invested heavily in online shopping and digital initiatives, particularly large-format superstores. Looking at the holiday season, Black Friday won’t be just one day for Walmart as its sales will run online from 12:01 on Thanksgiving and run through Dec. 1.
Walmart may be position itself against Amazon and retailers offering discounted products this holiday season by ensuring its cost remain competitive in the marketplace, Slate reported.
“Foran also authorized store managers to match the prices of Amazon and other online retailers,” Slate reported the CEO said in the earnings call. “While Foran said about half of Walmart’s 5,000-odd stores in the U.S. were already matching prices, formalizing the practice might help the company sway holiday shoppers from ordering a gift later on Amazon.”
Foran also pointed out challenges of the holiday season, which included a lack of new products in the entertainment department and decline of games and electronics in general. That segment typically leads to a large fourth-quarter sale boost, he said. The New York Times article reported Walmart has been able to grow its online global sales, but its brick and mortar stores in some international markets, like Japan, has been poor. In fact, Walmart announced it would be closing up to 30 underperforming stores, the NY Times reported.
In Thursday’s (Nov. 13) earnings report, it showed Walmart’s U.S. sales increased .5 percent for the quarter. Comp sales for the company’s Neighborhood Market increased 5.5 percent in that period. Walmart U.S. net sales increased $2.3 billion, or 3.4 percent to around $70 billion. Globally, Walmart is also growing as Walmart International grew net sales 1.7 percent to $33.7 billion. Walmart continues to grow its presence outside the U.S. and online. Despite some skepticism among its top leaders, Walmart’s International leader had a positive outlook for the company.
“We had a solid third quarter, once again growing operating income faster than sales, and we gained share in most of our largest markets,” David Cheesewright, Walmart International president and CEO said in a company earnings release. “I’m excited about the steps we’ve taken to accelerate growth in e-commerce, including the launch of new expanded assortments and services in Mexico and China. We also expanded the number of collection points for online customers in the U.K. and China.”