Walmart hits Q4 snag in e-commerce growth

Published on
February 21, 2018

There was more bad news for seafood suppliers to Walmart this week when the largest global retailer announced lower than expected e-commerce growth.

While Walmart's e-commerce sales rose 23 percent in the fourth quarter of fiscal year 2018 – covering the holiday selling season – the growth was significantly lower than the 50 percent jump in e-commerce sales Walmart posted during the third quarter. 

The news sent Walmart’s stock tumbling by 9.7 percent on 20 February, and the drop helped drag down the Dow Jones industrial average by 107 points in late morning trading.

The e-commerce decline comes on the heels of Walmart closing 63 Sam’s Club stores in the United States, as well as cutting between 400 and 500 executive positions.

However, for fiscal year 2018, Walmart’s e-commerce sales soared 44 percent. And Walmart expects U.S. e-commerce sales growth of around 40 percent in fiscal year 2019, Walmart CEO Doug McMillon said on the Q4 earnings conference call, MarketWatch reported.

McMillon said the decrease was mostly expected, as sales growth on Jet.com, which it acquired in 2016, slowed. He also said that the company was short on inventory after robust shopper demand during the holiday season.

A high volume of orders for gifts such as electronics and toys “harmed our basic in-stock on more everyday items and our basic in-stock for e-commerce suffered as a result,” McMillon said. “So we’re learning how to deal with higher volumes and learning how to deal with a higher peak than what we had previously.”

McMillon said the drop was a blip on an otherwise sunny forecast for the company.

“A smaller portion of the slowdown was unexpected, as we experienced some operational challenges that negatively impacted growth,” McMillon said. “Overall, we finished the year with e-commerce sales growth of more than 40 percent. So, we feel better about the year than the quarter.”

In addition to e-commerce growth, net sales at Walmart International increased 6.7 percent to USD 33.1 billion (EUR 26.8 billion), the retailer said.

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