Walmart shares sank in the US Tuesday trading session, after the retailer reported disappointing online sales over the Christmas period. While sales rose, they did so by less than expected. However, Walmart's UK division of stores, Asda, posted a third-straight quarterly sales rise.
Walmart shares ended the US session 10.17% lower at $94.11. After hours activity currently sees the Walmart stock marginally in the green.
Walmart’s online sales struggle
Walmart’s latest earnings release showed that sales at Walmart.com in the three months to the end of December 2017, grew 23%. However, that increase was below the stellar third quarter growth rate of 50% it recorded and was also lower than had been anticipated.
Total revenue across Walmart grew 3.1% in the fourth quarter and by 3% across 2017. However, fourth quarter profits fell 28%, while full year 2017 profits slipped 10.2%. The declines were mainly due to one off charges related to the new US tax rules.
“We just completed an exciting year with solid fourth quarter results and continued momentum in the business,” said Walmart President and CEO, Doug McMillon.
“Overall, we were pleased with most aspects of the quarter and confident in the foundational aspects of the business as we enter this new fiscal year,” McMillon added.
While the US-based retailer may have reported results that disappointed analysts and investors, it will be sticking with its plans to grow Walmart.com and improve its online performance.
“Looking ahead, we expect eCommerce growth to increase from the fourth quarter level as we enter the new year with about 40% growth for the year,” McMillon said. “We’re confident in our strategy to transform the company.”
Walmart is also currently guiding the following levels of growth for the full year 2018:
- Like-for-like sales growth across Walmart US of 2%.
- Earnings per share of between $4.75-$5.
- Capital expenditure of around $11 billion.