Retail

Walmart Forecasts Slow Sales Ahead

It could be a tough year ahead for Walmart, which may not be particularly shocking given the state of the bricks-and-mortar ecosystem.

The results of Walmart’s Q4 earnings made that clear when the company revealed that it expects “relatively flat” net sales for much of the year. The previous forecast had projected sales growth of 3-4 percent. This comes, of course, during a time when the retail giant is shuttering stores globally to adjust to the changing times.

While Walmart’s Q4 income was down nearly 8 percent to $4.57 billion, down from the prior year’s $4.97 billion (and total revenue falling 1.4 percent to $129.7 billion), there was a bright spot in Walmart’s earnings that shows it’s at least managing to take advantage of shopping trends.

That’s shown by its growth in eCommerce sales, particularly on the mobile side. While Walmart’s comp sales at Walmart U.S. stores were up just .06 percent (traffic up just .07 percent), eCommerce sales and GMV increased approximately 8 percent in the quarter. Walmart’s overall net sales were up 2.4 percent to $81.5 billion. But even with some growth, Walmart CEO Doug McMillon recognized one glaring fact during the company’s call with analysts: “We need more GMV growth from our eCommerce businesses.”

“Overall, this past year has been a year of investment, operational improvement and change, even while we delivered solid growth. We do see an underlying strength in our Walmart U.S. business that wasn’t there a year ago,” he said during the call.

McMillon also shared some figures about how the holidays shaped up digitally for Walmart. He noted that during the days between Thanksgiving and Cyber Monday, Walmart saw half of its online customers buying their orders online using a mobile device. In-store pick up and online grocery also gave its eCommerce side a boost. ECommerce has also been cutting into its overall margins as the retailer races to pump money into its digital side.

Looking specifically at Thanksgiving figures, Walmart said that more than half of its online sales came from a mobile device, which was more than double from the year prior. He also indicated the retailer saw “saw strong growth in both desktop and mobile conversion,” with mobile purchases nearly tripling in the holiday sales period.13

Still, Walmart faced eCommerce challenges outside the U.S., where McMillon said the company continues to see weakness. Specifically in Brazil, China and the U.K., Walmart’s eCommerce game isn’t quite up to what it expects, McMillon said, but noted its overall growth of 12 percent (to $13.7 billion, globally).

On the payments side, everyone has been waiting to hear more about Walmart Pay, but McMillon only gave brief comments on that subject saying: “I’m also excited about the introduction of Walmart Pay, and I was very proud of how different parts of our company worked together on it with a relentless focus on the customer experience.”

“I look forward to us rolling it out this coming year. We recently aligned our technology teams because we want more speed and more customer-centric and cost-efficient innovations like this one. We will deliver one Walmart experience to our customers.”

There were subtle hints toward Walmart’s continued digital ambitions, but not much meat to go from to gain a better sense of Walmart’s overall strategy for Walmart Pay.

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