While many retailers are entering the holiday period worried about how they’ll keep up with online competitors, Wal-Mart Corp. just posted better-than-hoped-for quarterly numbers, including a 50% jump in online sales. And while its competitors have spent the last few weeks sprinkling words like “cautious,” “conservative” and “competitive” in their quarterly announcements, the Bentonville, Ark.-based retailer is upping its guidance for the full year.
Total sales climbed 4.2% to $123.2 billion, or 3.8% in constant currency. In the U.S., a 1.5% increase in foot traffic boosted comparable-store sales 2.7%. And in its e-commerce division, net sales exploded, rising 50%. And it now expects same-store sales for the quarter ahead to gain between 1.5 and 2%. Operating income fell 6.9% to $4.76 billion.
Those results topped the consensus expectations, especially the same-store sales advance, improvements writes Karen Short, an analyst who covers the company for Barclays. While some of that improvement stems from hurricane-related sales, “Walmart continues to demonstrate it’s ‘on the right side of the wall’ by simultaneously making progress evolving its business while at the same time delivering solid financial results,” she writes. “Walmart continues to invest in price, which is exactly what is needed to maintain dominance.”
The solid showing means Wal-Mart is “moving in the right direction, productivity loop is starting to turn and I’m encouraged by our results,” says president and CEO Doug McMillon, in remarks prepared for investors. He says the company now offers more than 70 million SKUs online. “Existing customers have become advocates for popular initiatives like online grocery and free two-day shipping, and as a result, new customers, suppliers and partnerships are coming to Walmart.”
Besides attracting premium brands, like Cuisinart, KitchenAid, Bose and the recent announcement of a partnership with Lord & Taylor, he says it is continuing to test same-day and next-day delivery, as well as crowdsourced partners and deliveries made by Walmart associates. And it is continuing to sharpen offerings for Jet.com’s urban, higher-income customers.
The company is also pumping up in-store offerings like designated Holiday Helpers, a pickup discount for online shoppers, and more than 20,000 holiday parties, including product demos.
Holiday ads, using the “Rock this Christmas” theme, are highlighting the different ways the store is trying to save shoppers either time or money, set to high-energy tunes from the likes of Pete Townsend, the Black Eyed Peas and Daddy Yankee.