Walmart 4Q profit misses, e-commerce cools
BENTONVILLE, Ark. (AP) — Walmart reported a fourth-quarter profit that missed Wall Street expectations and struggled with slower e-commerce sales during the period.
Its shares slipped more than 6 percent before the market open on Tuesday.
Still, the world’s largest retailer announced better-than-expected sales overall and higher customer counts as the company overhauls its stores and its online services.
The mixed results reflect Walmart’s continued challenges to fight online leader Amazon even as it makes huge investments in both its digital business and stores. E-commerce sales in its U.S. business slowed to 23 percent during the fourth quarter, from 50 percent in the third quarter. The company blamed some of the slowdown to “operational challenges” Still, the company finished the year with more than 40 percent growth in online sales and it expects that pace to continue for the coming year.
The nation’s largest private employer announced last month that it would raise the starting salary for U.S. workers to $11 an hour, giving one-time cash bonus of up to $1,000 to eligible employees and expanding its maternity and parental leave benefits. A number of U.S. corporations have announced employee bonuses and expanded benefits following drastic changes to the U.S. tax code.
But a hot economy has now forced employers to compete for workers who can be more choosey. The U.S reported this month that hourly pay rose in January from a year earlier at the fastest pace in eight years and the unemployment rate hovered at only 4.1 percent for the fourth consecutive month.
Since buying Jet.com for more than $3 billion a year and a half ago, Walmart has added online services, acquired brands like Bonobos and ModCloth and vastly expanded the number of items available online. Walmart is also getting ready to launch an overhauled website with a focus on fashion and home furnishings. It has teamed up with Lord & Taylor to create dedicated space on its site.
Walmart has aggressively cut prices and is planning to double the number of stores where groceries can be ordered online and picked up curbside at a store, to 2,000 locations this year.