Walmart released its fourth quarter and fiscal year 2019 results this week. The company finished the year with good momentum and is pleased with its performances in international markets.
Walmart’s key numbers
- Walmart's total revenue in Q4 increased by 1.9% to US$138.8bn
- US comp store sales increased by 4.2%, and by 6.8% on a two-year basis, the strongest in nine years
- Sam's Club comp sales increased by 3.3%, and ecommerce sales grew 21%
- US ecommerce sales increased 40% for the full year
- Net sales at Walmart International were US$32.3bn, a decline of 2.3%. Excluding currency, net sales were US$34.0bn, an increase of 2.7%
Fiscal year 2019 highlights: Asia
- Acquired majority stake in Flipkart Group, India’s leading eCommerce business
- Increased investment in Dada-JD Daojia, a crowd-sourced delivery platform in China
- Launched first Walmart Rakuten Ichiba Store, the first Walmart eCommerce store in Japan
- Established joint venture with Rakuten for grocery delivery in Tokyo
- Walmart China established strategic partnership with Tencent, including use of WeChat Pay and Scan & Go
- Launched new depots in China for accelerated eCommerce fulfilment and delivery
China: significant growth opportunities with challenges ahead
In China, comp sales decreased by 0.2% in the quarter as the calendar shift of the Mid-Autumn Festival and a slower economic environment affected sales growth. Without the calendar shift, comp sales would have been positive.
Walmart continues to see significant growth opportunities and has identified provinces that are a priority. Walmart China are improving the value proposition through better quality of fresh items, as well as new store designs and omnichannel initiatives.
Amid uncertainties with trade and other macro factors that can make for a more challenging environment, Walmart is confident in this important market.
India: excited and remain optimistic about the market
Factors affecting Walmart’s fourth quarter international operating income (down by -2.8% in constant currency) included the dilution from Flipkart. The company remains optimistic about the ecommerce opportunity in India, given the size of the market, the growing middle class, the low penetration of ecommerce in the retail channel and the fast pace it is growing. Walmart stated that Flipkart’s results were in line with expectation.
Overall, the company is pleased with the progress being made in its international markets and has plans to accelerate its omnichannel capabilities in these markets through partnerships and acquisitions.
Walmart see the future as a frictionless shopping experience across physical stores and online. As customers raise their expectations, competition persists and the omnichannel continues to evolve, the retailer will increasingly embrace new technologies to solve problems for customers in a seamless way. As emerging technologies come together, the pace of change in the next five years will accelerate versus the previous five years in food and grocery retail industry.
Retail Analysis Asia