Walmart’s bruising battle with Amazon saps its 4Q results
NEW YORK — Walmart is getting bruised in its battle with online leader Amazon.
The world’s largest retailer on Tuesday reported a smaller-than-expected fourth-quarter profit as it wrestled with slower e-commerce sales during the busiest time of the year. The results underscore the company’s challenges in a fiercely competitive retail landscape.
Its stock took a beating, falling 10.2 percent to post its biggest single-day percentage drop in 30 years. Its decline was a big factor in a drop of 1 percent by the Dow Jones industrial average.
The fourth-quarter profit numbers overshadowed the discounter’s betterthan-expected sales at its established stores and higher customer traffic as online services linked to its stores attract more shoppers.
The company’s mixed results raise concerns its push to narrow the gap between itself and Amazon.com Inc. may be losing steam. This comes despite it making huge investments in both its digital business and its stores, where it has taken steps like lowering prices.
Walmart’s e-commerce sales growth in its U.S. business slowed to 23 percent during the fourth quarter, a sharp decline from 50 percent in the third quarter. It noted last year’s results got a big boost from its acquisition of online retailer Jet.com.
But it also acknowledged its own mistakes — a surge of TVs, toys and electronics into its warehouses during the peak periods of the holiday season crowded out more basic items. Still, Walmart finished the year with more than 40 percent growth in online sales in the U.S., and it expects that online sales will be revived this year to hit that same pace.
Walmart and other retailers are looking at new ways to compete in light of swiftly changing shopping habits. Albertsons Cos., the owner of Safeway and other grocery brands, announced Tuesday it is buying the drugstore chain Rite Aid.
Walmart itself is building fewer big stores and focusing on investments in its online business while beefing up benefits for its workers.