Walmart’s Christmas wasn’t humbug, but it was less merry than expected
Walmart came up short for the Christmas selling season. The world’s largest retailer posted sales and earnings that were below Wall Street’s expectations, with the chain citing disappointing apparel and toy sales as factors.
Same-store sales in the U.S. were up 1.9 percent for the fourth quarter, below the 2.3 percent consensus among analysts. Walmart’s $1.38 earnings per share also fell short of the $1.43 anticipated by investors.
“The fourth quarter started and ended strong with solid sales growth through Cyber Monday and in January,” said Brett Biggs, Walmart Inc.’s chief financial officer in a statement. “In the few weeks before Christmas, we experienced some softness in a few general merchandise categories in our U.S. stores. However, Walmart U.S. grocery sales and eCommerce sales were strong throughout the quarter. Sam’s Club performed well, including solid results in eCommerce.”
Walmart’s e-commerce sales were up 35 percent during the period, down from a 41 percent increase in the third quarter. The retailer reported e-commerce growth of 37 percent for the year while forecasting a 30 percent gain in its fiscal 2021.
While Walmart has pointed to the success of its e-grocery operations, the same cannot be said for its overall e-commerce business, which has been shaken up over the past year as the retailer tries to stem its losses. Walmart sold off ModCloth, cut staff at Bonobos and Jet.com and closed Hayneedle’s headquarters in Omaha. Last week, the retailer announced it was discontinuing its Jetblack personal shopping text service on Feb. 21.
Walmart’s earnings report follows Target’s announcement that its 2019 holiday selling season sales were below its expectations. The chain reported same-store sales growth of 1.4 percent, well below the three to four percent range Target had forecast for itself.
The toy category, as at Walmart, also underperformed at Target, which experienced flat sales for the last two months of the year. Target posted a 19 percent increase in its digital sales in November and December.
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DISCUSSION QUESTIONS: What do you make of Walmart’s good, not great, 2019 holiday sales performance? Do Walmart’s fourth quarter and Target’s November and December results offer clues into how these chains and the retail industry will fare in 2020?