What's going on?
US retailing giant Walmart delivered a decent set of first-quarter earnings on Thursday, although slowing sales growth mired the mood.
What does this mean?
For Walmart, the world’s largest company by sales, quarterly profit of $3.8 billion topped investors’ expectations, climbing 80% compared to the same period last year. Revenue, however, fell short – with Walmart delivering only 1% growth.
Sales in the company’s US home market weren’t the problem – they rose 3%, the best first-quarter growth for nine years. Over the surface of the deep, however, the value of Walmart’s international store sales dropped 5%, thanks to a stronger US dollar making them worth less back in ‘Murica. Nevertheless, investors were cheered by online fashion, homeware, and grocery deliveries helping Walmart post a solid 37% growth in US ecommerce sales.
Why should I care?
For you personally: Eat your internet ham.
In a bid to fend off Amazon’s online dominance, Walmart has been pouring money into new technology allowing it to fulfill online orders more quickly and grow its thriving efood business further. Plans announced earlier this week to launch free next-day delivery and voice-ordering functionality are just as well, given Amazon’s own scheme to shortly start offering one-day shipping as standard for its legion of Prime customers (it’s also expanding Whole Foods delivery). Shame about the 14% annual growth in ecommerce’s use of packaging, though… (tweet this)
The bigger picture: Only connect.
Given India’s status as the world’s fastest-growing economy, it’s no wonder that Walmart forked out $16 billion last year for a big slice of Flipkart, the country’s biggest ecommerce platform. Although its Indian subsidiary has been a drag on profit so far, the high cost of building out its operations should, Walmart hopes, reap rewards in the future. It might need them: Walmart’s foiled plans for its UK arm, Asda, may now see the British supermarket listed on the stock market – but likely not for some time.