Walmart Inc. (NYSE:WMT) attributes its robust performance to the strength of its diversified business, spanning various segments, markets, channels, and formats. The company’s success is evident in its ability to navigate the evolving retail landscape by leveraging both in-store and digital channels. Walmart’s commitment to innovation, particularly in e-commerce, and its ventures like advertising have been key drivers amidst challenges such as increased costs and economic volatility. Over the past year, WMT shares have rallied 19.2%, outpacing industry growth of 18.6%.
Omnichannel Strategy
Walmart’s strong omnichannel business continues to drive growth, with store-fulfilled delivery sales increasing by 50% in the fourth quarter of fiscal 2024. Leveraging its extensive store network, Walmart efficiently fulfills e-commerce orders, aided by initiatives to enhance e-commerce operations through acquisitions, partnerships, and improved delivery and payment systems. Globally, e-commerce sales surged 23% in the fourth quarter, constituting 18% of Walmart’s total net sales. The U.S. saw a 17% increase in e-commerce sales, driven by pickup and delivery services, while the international segment witnessed a 44% surge fueled by marketplace and omnichannel offerings. At Sam’s Club, e-commerce sales rose by 17% due to robust curbside and delivery services.
Innovation and Expansion
Walmart continues to innovate in its supply chain and expand its businesses, including Walmart GoLocal, Walmart Connect, Walmart Luminate, Walmart+, and Walmart Fulfillment Services. Strategic acquisitions, such as VIZIO HOLDING and Flipkart, bolster Walmart Connect and the International segment, respectively. Walmart’s majority stake in PhonePe enhances its presence in India’s digital transactions market. The company’s aggressive efforts in online grocery expansion, highlighted by services like Express On-Demand Early Morning Delivery and the Walmart+ membership program, enhance delivery capabilities and customer convenience. By the fourth quarter of fiscal 2024, Walmart U.S. boasted close to 4,600 pickup locations and more than 4,300 stores offering same-day delivery services.
Outlook
Walmart’s initiatives underscore its position as a retail powerhouse committed to sustained success and customer engagement. For fiscal 2025, management anticipates consolidated net sales growth of 3-4% and consolidated operating income growth of roughly 4-6%. Adjusted EPS is projected to be in the range of $6.70-$7.12 on a pre-split basis, and $2.23-$2.37 on a post-split basis. The company aims for consolidated net sales to increase by 4-5% at cc in the first quarter of fiscal 2025, including a nearly 100 bps gain from the leap year.
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