SaveSave story

Walmart is losing more ground to Amazon

Amazon warehouse, Dunfermline, Scotland. Photo: Jane Barlow / PA Images / Getty

Walmart is supposed to be making a solid run for second place in online shopping. But a leading Wall Street bank downgraded its shares today, as Amazon is instead extending its already-towering dominance of the market.

What we're hearing: Walmart had a respectable 2017 in terms of overall sales, racking up $485 billion in revenue, up 3.1% from the prior year. But Thomas Paulson of Inflection Capital says the retailer had $11.5 billion in online sales last year, amounting to 1.9% of a total $606 billion U.S. e-commerce market. Amazon commanded $219 billion in e-commerce sales — 36.2% of the whole, he said.

Wall Street has turned against Walmart, trading its share price down by 16% since its last earnings report on Feb. 20 (Amazon shares by comparison are up 23% this year). In a report released today, Oppenheimer downgraded Walmart, saying "we no longer see the case for outperformance," CNBC's Tae Kim reported.

Why it matters: If any U.S. retailer is to stand up to the Amazon behemoth, analysts thought it would be Walmart and its subsidiary. But the numbers suggest that if anything, it will be a Walmart struggle and not a straight line there.

  • Walmart's e-commerce sales have risen steadily; from $7.4 billion in 2015 to $8.6 billion in 2016. That same year, it bought, which was key in bumping up on-line sales to $11.5 billion last year.
  • Buoyant, in October 2017 the company forecasted that its e-commerce sales would soar by 40% in 2018. That triggered a surge in the company's share price to an all-time high.
  • But then, in earnings reported last month, Walmart said e-commerce sales were up 23% in the fourth quarter, less than half its growth in the prior three quarters. Now, investors appear to have lost confidence that Walmart can go head-to-head with Amazon; its shares were trading today at $88, down from $104.78 the day before the earnings report.
Ina Fried 5 hours ago
SaveSave story

Uber crash could put brakes on self-driving cars

Uber app. Photo: Pau Barrena / AFP via Getty Images

It's finally happened. A self-driving car has hit and killed a pedestrian, a scenario everyone in and out of the industry knew would eventually happen. Uber, which operated the car in question, has put on hold its self-driving car effort in three cities and the NTSB is investigating.

So now what? This leads to a multitude of questions that need answers — plus the warning that there are two big mistakes that we could make as a society in dealing with self-driving cars.

Erica Pandey 9 hours ago
SaveSave story

The treacherous future for terrestrial radio

Radio equipment
Recording equipment. Photo: Catherine Ivill / Getty Images

iHeart Media, the country's biggest radio broadcaster, filed for bankruptcy protection last week. The news came after the company said it expected bankruptcy within a year last April and after its greatest rival, Cumulus Media, filed in November.

Why it matters: The fates of iHeart and Cumulus raise questions about the future of terrestrial radio, which is struggling to compete with digital broadcasting and streaming services like Spotify. Although the companies' ad-driven revenue model is facing headwinds, market research indicates that consumers are still tuning into radio in robust numbers.