Walmart reports lower-than-expected Q4 earnings, despite e-commerce sales growth of 35%
Walmart's fourth quarter profit and revenue came in a little lower than expected. And am I the only one who looked at this report and was reminded of targets holiday quarter report because it kind of seemed like it wasn't bad it wasn't a train wreck but particularly the fact that video games and toy sales those segments for wall marked really dragged down the result more so than say e Commerce? Which was up another. Thirty five percent. Yeah I mean I do. I agree with what you're saying there. It made me think of target. Initially it also made me think of Amazon and really like Amazon really at a blowout holiday. Quarter the one thing I do think the difference between Walmart in target and I think the reason why the markets okay with this report basically flat. Yeah Yeah I mean I think really it is because of grocery I I think that when you look at the investments that Walmart made in grocery so long ago and I don't WanNa say skepticism. But maybe just sort of the furled eyebrows like. Is that really something that people want or is that? GonNa there was skepticism but there but now that's more than fifty percent of their. Us sales groceries. This is a grocery company in in so I think that's important because it's not very surprising to see the weakness and things like toys games and apparel very highly competitive markets in. We've we've certainly seen toys have been redefined just over the past decade thanks to technology. It's a bit of a different Market all together for that so I. I do think that they're strong. Presence in grocery helps to to mitigate any of the other weakness that we might see in a quarter like this and I mean it wasn't a week it was a little bit below expectations but I think there's enough to be optimistic optimistic about the you know toward the markets reacting to wait is today co. Doug Macmillan. I think deserves a lot of credit for a lot of different things and one of them is. I think he's just an above average communicator in terms of guidance. And also just in with this quarter alone. Just coming out and saying yeah. This wasn't our best and he in talking about e commerce. You see him. Start to ratchet that guidance back and saying look it's going to come in law. I would just point out that we've had. I don't know how many quarters in a row of Walmart growing their ECOMMERCE segment anywhere from the high teens to what we saw with this latest quarter. You know the mid thirty so even if that CO scales back its off of a much bigger base than it was two three years ago. Yeah I can't help but wonder if we won't see another acquisition at some point here maybe we will. Maybe we won't. I mean I do feel like they are. They're looking at this business more and more as an ECOMMERCE in a grocery play that also has everything else under the sun. I mean camps. Were were certainly below expectations. I think maybe the troubling part there it was because of transactions and average ticket I mean transactions in. Us stores were up one percent for the quarter. But I mean it was one half percent a year ago and An average ticket was was up less than one percent and I mean that was to two point six percent a year ago so I mean there were clearly some pressures they're in Walmart is is is a low margin business to begin with so you had to be really really aware of that kind of stuff. I mean I. I think you could be interesting to watch how I mean. I can't believe Mardi talking about this coming holiday season. But let's let's talk about that for a second because there is a big Gaming Console yes fresh cycle coming absolutely I do think there is Certainly potential therefore for them to to exceed expectations was he had the rest of the year goes but I mean you know this is a. This is a traditional retail story right. I mean if you look at Walmart I I always like making this comparison because it just tells you how the market views these different companies but walmart with a market cap of three hundred thirty five billion That's on five hundred twenty four billion dollars in sales and you look at Amazon which is now over one trillion dollars and that's off of two hundred eighty billion dollars in sales and so while Walmart grocery which is awesome grocery ain't aws in an producing those same kinds of margins and it never will But what grocery does is it keeps the traffic coming back and we're seeing more and more as this retail environment Sort of re reshapes itself Really the key is saying. Make sure you have people in those stores whether it's virtually or physically make sure you have people in those stores and grocery is one way to really really do that.