Walmart flexes in the fourth quarter, beats all expectations

Online sales surged 43 percent at Walmart during the holiday quarter

Online sales surged 43 percent at Walmart during the holiday quarter

Walmart's USA same-store sales increased 3.6%.

Walmart is the first major retailer to deliver fourth-quarter results, and its performance provides more evidence that efforts to expand services online as well as in the stores are widening the gap between itself and traditional rivals while at the same time, it's holding its own against Amazon. E-commerce sales are likely to rise about 35%, the company said.

The company's shares rose 4% on the strong results, bringing its market cap above $300 billion again. Sears is shrinking, and J.C. Penney is floundering. The figure excludes sales from fuel. The company has done a lot to beef up its e-commerce offerings through major acquisitions like Jet.com and Bonobos in recent years, and it paid off with USA online sales jumping 43 percent over a year ago.

Since buying Jet.com more than two years ago, Walmart has been expanding online by acquiring brands and adding thousands of items.

One of the main drivers of its e-commerce success has been its grocery pickup and delivery, which is now available in more than 2,100 and almost 800 stores, respectively. The improvements - along with its $17 billion acquisition of India's e-commerce giant Flipkart - comes as Walmart amps up the fight against Amazon for dominance in the global retail sector.

Walmart has focused on revamping its e-commerce experience by adding new technologies and updating its website. Comparable sales for Walmart stores in the USA - a key performance barometer - rose 4.2 per cent in the quarter that included Christmas, beating analysts' estimates by a full per centage point. The discounter hasn't yet disclosed the year-end figures.

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"Pleasingly, Walmart is successfully broadening its online base of customers and is now attracting both younger and more affluent demographics", wrote Neil Saunders, managing director of research firm GlobalData Retail, in a published report.

The company reiterated the full-year sales and profit guidance it gave in October, including same-store sales growth at U.S. Walmart stores of between 2.5 and 3 per cent - a slight slowdown from the fiscal year that just ended. Excluding one-time items, Walmart earned $1.41 per share, beating analysts' expectations of $1.33 per share.

Revenues were up 1.9 per cent at $138.8 billion.

For the full year, Walmart's total revenue rose 2.8% to $514.4 billion.

On its quarterly call with analysts, Walmart said it will spend the most money on store remodels, e-commerce initiatives and bulking up its supply chain in 2019. The retailer sees consolidated net sales growth of at least 3% on a constant-currency basis and adjusted earnings per share declining by a low-single-digit percentage range.

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