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Walmart's (WMT) Q4 Earnings Likely to Gain on Online Strength
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Walmart Inc.’s (WMT - Free Report) fourth-quarter fiscal 2021 results, which are scheduled to release on Feb 18, are likely to have benefited from continued strength in the e-commerce business. Consumers’ increased preference for online shopping, especially amid the pandemic-led social distancing has been working well for the company. The company, on its third-quarter earnings call, said that it has doubled the U.S. store associate count this year, supporting the company’s digital and omnichannel efforts. Certainly, Walmart’s combination of a robust store network and growing digital capacity has been keeping it in good shape.
Efforts to Ace Delivery
This supermarket biggie has been gaining on burgeoning demand for essential items amid the pandemic-led elevated at-home consumption and pantry loading trends. Further, increased stay-at-home practices to maintain social distancing has led to an accelerated shift to online shopping. To this end, Walmart’s concerted endeavors to bolster e-commerce operations, mainly by improving delivery services, have been helping the omnichannel retailer make the most of the rising demand opportunity. In connection with this, the company’s launches of the Walmart+ membership program; drone delivery pilots in the United States with Flytrex, Zipline and DroneUp; and a pilot with Cruise to test grocery delivery through self-driven all-electric cars are noteworthy moves.
The Walmart+ program includes unlimited free delivery, Scan & Go options and fuel discounts. In fact, Walmart eliminated the shipping minimum of $35 from its Walmart+ program in early December. Consequently, members of Walmart+ can get items shipped for free the next day or within two days, irrespective of the basket total. However, delivery of items like groceries from Walmart’s stores would continue to carry the $35 minimum. At the same time, the company announced that it was increasing the number of locations that could be used for fuel savings by its Walmart+ members and will include Sam’s Club fuel stations across the nation.
Apart from these, Walmart unveiled an alliance with Door Dash in the third quarter of fiscal 2021 to deliver prescriptions from pharmacies of Sam’s Club, alongside expanding Scan & Go to all fuel stations at U.S. Sam’s Clubs. Prior to this, the company unveiled Express Delivery during the first quarter at several stores, which helps it deliver orders to customers in less than two hours. As of the fiscal third quarter, Walmart U.S. had 3,600 pickup locations and 2,900 same-day delivery locations.
Other than strengthening its delivery arm, Walmart has been taking several e-commerce initiatives. During the third quarter of fiscal 2021, the company unveiled an additional investment in India’s Ninjacart, for technology and supply-chain solutions. Apart from this, the company’s contracts with Goldman Sachs (GS - Free Report) and Shopify (SHOP - Free Report) , among others; buyouts of ShoeBuy, Moosejaw and Bonobos, to name a few, are noteworthy. Further, the buyout of a major stake in Flipkart has been bolstering Walmart’s International segment. Surely, such efforts have been driving its e-commerce business and helping it stay firm amid the growing competition from Amazon (AMZN - Free Report) . Impressively, Walmart’s U.S. e-commerce sales surged 79% in the third quarter with strength across all channels, including robust traffic at Walmart.com. Markedly, marketplace and pickup & delivery sales jumped at a triple-digit rate.
Importantly, the Zacks Consensus Estimate for revenues is pegged at $146.4 billion, suggesting an increase of 3.4% from the prior-year quarter’s reported figure. The Zacks Consensus Estimate for earnings has increased 2% in the past 30 days to $1.50 per share, which also indicates an 8.7% rise from the figure reported in the prior-year period.
Other Trends
Walmart’s e-commerce business along with its strong efforts to bolster store sales helped its U.S. comp sales to increase for the 25th straight time in the last reported quarter. Apart from these, the company’s unique deals and saving events along with other initiatives to make the most of consumers’ evolving shopping needs and the holiday season are likely to have yielded results. However, the impact of the company’s pricing investments on margins cannot be ignored. Also, the company has been seeing high costs related to COVID-19, like higher wages and benefits along with costs associated with sanitization and other safety measures. (Read More: Walmart Lined Up for Q4 Earnings: Key Things to Note)
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
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Walmart's (WMT) Q4 Earnings Likely to Gain on Online Strength
Walmart Inc.’s (WMT - Free Report) fourth-quarter fiscal 2021 results, which are scheduled to release on Feb 18, are likely to have benefited from continued strength in the e-commerce business. Consumers’ increased preference for online shopping, especially amid the pandemic-led social distancing has been working well for the company. The company, on its third-quarter earnings call, said that it has doubled the U.S. store associate count this year, supporting the company’s digital and omnichannel efforts. Certainly, Walmart’s combination of a robust store network and growing digital capacity has been keeping it in good shape.
Efforts to Ace Delivery
This supermarket biggie has been gaining on burgeoning demand for essential items amid the pandemic-led elevated at-home consumption and pantry loading trends. Further, increased stay-at-home practices to maintain social distancing has led to an accelerated shift to online shopping. To this end, Walmart’s concerted endeavors to bolster e-commerce operations, mainly by improving delivery services, have been helping the omnichannel retailer make the most of the rising demand opportunity. In connection with this, the company’s launches of the Walmart+ membership program; drone delivery pilots in the United States with Flytrex, Zipline and DroneUp; and a pilot with Cruise to test grocery delivery through self-driven all-electric cars are noteworthy moves.
The Walmart+ program includes unlimited free delivery, Scan & Go options and fuel discounts. In fact, Walmart eliminated the shipping minimum of $35 from its Walmart+ program in early December. Consequently, members of Walmart+ can get items shipped for free the next day or within two days, irrespective of the basket total. However, delivery of items like groceries from Walmart’s stores would continue to carry the $35 minimum. At the same time, the company announced that it was increasing the number of locations that could be used for fuel savings by its Walmart+ members and will include Sam’s Club fuel stations across the nation.
Apart from these, Walmart unveiled an alliance with Door Dash in the third quarter of fiscal 2021 to deliver prescriptions from pharmacies of Sam’s Club, alongside expanding Scan & Go to all fuel stations at U.S. Sam’s Clubs. Prior to this, the company unveiled Express Delivery during the first quarter at several stores, which helps it deliver orders to customers in less than two hours. As of the fiscal third quarter, Walmart U.S. had 3,600 pickup locations and 2,900 same-day delivery locations.
Walmart Inc. Price, Consensus and EPS Surprise
Walmart Inc. price-consensus-eps-surprise-chart | Walmart Inc. Quote
E-Commerce Strength Likely to Stay
Other than strengthening its delivery arm, Walmart has been taking several e-commerce initiatives. During the third quarter of fiscal 2021, the company unveiled an additional investment in India’s Ninjacart, for technology and supply-chain solutions. Apart from this, the company’s contracts with Goldman Sachs (GS - Free Report) and Shopify (SHOP - Free Report) , among others; buyouts of ShoeBuy, Moosejaw and Bonobos, to name a few, are noteworthy. Further, the buyout of a major stake in Flipkart has been bolstering Walmart’s International segment. Surely, such efforts have been driving its e-commerce business and helping it stay firm amid the growing competition from Amazon (AMZN - Free Report) . Impressively, Walmart’s U.S. e-commerce sales surged 79% in the third quarter with strength across all channels, including robust traffic at Walmart.com. Markedly, marketplace and pickup & delivery sales jumped at a triple-digit rate.
Importantly, the Zacks Consensus Estimate for revenues is pegged at $146.4 billion, suggesting an increase of 3.4% from the prior-year quarter’s reported figure. The Zacks Consensus Estimate for earnings has increased 2% in the past 30 days to $1.50 per share, which also indicates an 8.7% rise from the figure reported in the prior-year period.
Other Trends
Walmart’s e-commerce business along with its strong efforts to bolster store sales helped its U.S. comp sales to increase for the 25th straight time in the last reported quarter. Apart from these, the company’s unique deals and saving events along with other initiatives to make the most of consumers’ evolving shopping needs and the holiday season are likely to have yielded results. However, the impact of the company’s pricing investments on margins cannot be ignored. Also, the company has been seeing high costs related to COVID-19, like higher wages and benefits along with costs associated with sanitization and other safety measures. (Read More: Walmart Lined Up for Q4 Earnings: Key Things to Note)
Walmart currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>