Online Grocery Sales Pull Walmart Out of Pre-Holiday

Mega retailer Walmart reported, on Tuesday, that earnings and revenue for this past holiday quarter topped analyst expectations, supported mostly on a 43 percent boost to e-commerce sales.  And, more specifically, this boost came from consumers using Walmart’s online grocery delivery service, spending more per trip than the previous average. 

According to Walmart CEO Doug McMillon, America has a “favorable economic environment” right now and that has helped the company improve sales.  Furthermore, this growth has put Walmart in the position to take some market share away from rivals, not only in the grocery department but in things like toys as well. 

Now, the industry showed some concern over the retailer—and the whole industry, really—when Walmart posted less than stellar data in December.  Keep in mind that the final two months of the year are typically among the best for the retail industry.  That said, posting their results on Tuesday helped reassure analysts—and Wall Street—that Walmart—and the whole of the retail industry—may not be suffering as deeply as had been originally anticipated.  It should also be noted, however, that Walmart did get a bump, too, from the early release of food stamp benefits due to the government shutdown. 

WalMart CFO Brett Biggs comments, “To us, the consumer looks like they’re in pretty good shape. Gas prices are down [and] we’re always monitoring the consumer and are ready to act if things change, but we feel our guidance is good for the next year and our business model works well in most environments.”

All things considered, the company said it is on track with its 2019 sales outlook. For one, the retail chain has managed to raise its annual dividend by 2 percent—to $2.12 per share, from $2.08—which will be payable to shareholders on the first of April.  Overall, shares for Walmart were up nearly 5 percent—around $104 per share—on Tuesday morning. 

Taking a closer look at some of the numbers, Walmart reported a net income (for the quarter ending Jan 31) of $1.27 per share, for a total of about $3.69 billion.  This is significantly higher than the 73 cent—about $2.18 billion—per share earnings from one year ago. Even excluding one-time items, Walmart posted an 8 cent boost over analyst expectations, at $1.41 per share.  In addition, revenue climbed almost 2 percent to $138.79 billion (up from $136.27 billion), also from one year ago.