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Holiday sales for brick-and-mortar retailers were disappointing
as 2019 saw a majority of shoppers switch to online buying,
helping Amazon <AMZN.O> report "record" sales for the period.
Retailers such as Target Corp <TGT.N>, Macy's Inc <M.N> and
Kohl's Corp <KSS.N>, however, have reported dismal sales for the
crucial period, which had six fewer days in 2019.
"Walmart's shockingly bad results for its all-important holiday
shopping quarter indicate that some of the company's recent
investments to bolster its e-commerce operations have failed to
materialize," said Jesse Cohen, senior analyst at financial
markets platform Investing.com.
Walmart has been spending heavily to grow its online business
and build up the digital capabilities of its stores, through
services that help shoppers buy groceries online for pickup in
store parking lots.
The company said it expects online sales to grow about 30% in
fiscal 2021, down from last year's growth of 37%. For the
holiday quarter, the company reported a 35% rise, its slowest in
nearly two years.
Shares of the Bentonville, Arkansas-based retailer, which rose
27% in 2019, fell 1% in early trading on Tuesday.
Sales at Walmart's U.S. stores open at least a year rose 1.9%,
excluding fuel, in the fourth quarter ended Jan. 31, well below
analysts' average estimate of 2.35%. Results for the quarter
were hit by a shorter holiday season and lower demand for
apparel, toys and electronics.
"In the few weeks before Christmas, we experienced some softness
in a few general merchandise categories in our U.S. stores,"
Chief Financial Officer Brett Biggs said.
The company forecast full-year profit to be between $5.00 and
$5.15 per share, below expectations of $5.22. The forecast
excludes any potential financial effect from the coronavirus
outbreak in China, the company said.
"Walmart's weak guidance outlook for 2021 indicate that more
storm clouds are on the horizon, even without accounting for the
effects of coronavirus' spread," Cohen said.
Adjusted earnings per share increased to $1.38 per share, but
missed the average estimate of $1.43 per share.
Total revenue rose 2.1% to $141.67 billion, missing the estimate
of $142.49 billion.
(Reporting by Nandita Bose in Washington and Aishwarya Venugopal
in Bengaluru; Editing by Saumyadeb Chakrabarty)
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