Walmart stock soars on promised e-commerce growth
two Wal-Mart employees walk past a sign in the lobby at the Walmart.com office in California. (Photo: Jeff Chiu / AP)
Walmart stock rose roughly 4.5% on Tuesday morning, following an investor-day presentation in which it estimated that its e-commerce sales would grow by 40% in the fiscal year ending January 2019, while maintaining its current pace of profit growth.
Why it matters: The failure of traditional retailers to shift their businesses from the storefront online, without significantly shrinking profit margins, has crushed the stocks of well-known companies like Foot Locker, Macy's and Target in 2017. But Walmart has emerged as one Amazon competitor that is more gracefully transitioning to a world of e-commerce.
What Walmart has done right: Cowen analyst Oliver Chen writes in a note to clients that Walmart is:
- Expanding its online selection;
- Offering free two-day delivery on orders of $35 or more;
- Expanding curbside grocery pickup to 900 stores nationwide;
- and making shrewd acquisitions, like Walmart's recent takeover of Bonobos, that has helped it gain expertise in new categories.