Tills ring out at Walmart as holiday sales beat forecasts

WALMART Inc reported an estimatebeating jump in holiday quarter sales yesterday as a strong economy boosted consumer spending and fueled more e-commerce purchases, sending shares of the world’s largest retailer up nearly 3 percent.

The performance offered a glimpse into the health of the US economy as spending was helped by a strong labor market and cheaper gasoline prices.

“We still feel pretty good about the consumer. We haven’t seen much of a change,” Walmart Chief Financial Officer Brett Biggs said.

“The data we are seeing still looks pretty healthy. Gas prices are down year over year, which helps.”

US retail sales recorded their biggest drop in more than nine years in December, the government reported last week, as receipts fell across the board, suggesting a sharp slowdown in economic activity at the end of 2018.

But overall sales for the 2018 US holiday shopping season hit a six-year high as shoppers were encouraged by early discounts, according to a Mastercard report in late December.

Walmart sales at US stores open at least a year rose 4.2 percent, excluding fuel, in the fourth quarter ended January 31. The gain exceeded analysts’ expectations of 2.96 percent, according to IBES data from Refinitiv.

Online business booming

Sales were also boosted after federal officials distributed food stamp aid early due to the partial government shutdown, the company said.

Adjusted earnings per share increased to US$1.41, beating expectations of US$1.33, according to IBES data from Refinitiv.

Online sales jumped 43 percent during the quarter, in line with the previous quarter’s rise, helped by the expansion of Walmart’s online grocery pickup and delivery services and a broader assortment on its website.

The company has expanded a program that allows customers to order groceries online and pick them up at its US stores.

It said it will have the service at 3,100 stores by next January. At the end of the third quarter it was offered at 2,100 stores.

Walmart will add grocery deliveries to about 800 more stores by the end of the year, bringing the total to 1,600 stores.

Grocery sales currently make up 56 percent of total revenue.

At its investor day last year, Walmart Chief Executive Officer Doug McMillon said that Walmart has an advantage in the food category by offering fresh food within 16 kilometers of 90 percent of the US population.

Walmart is partnering with thirdparty couriers and working with so-called gig, or freelance, drivers, who are cheaper than full-time employees, to drive down costs.

(Reuters)