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(Timothy Fadek / Bloomberg News)
Walmart on Tuesday lowered its earnings forecast for fiscal year 2019, taking into account the financial impact of its largest acquisition, which was conducted relentlessly: Flipkart, an Indian online retailer. But the outlook for 2020 is optimistic.
Walmart bought a 77% majority stake in Flipkart for $ 16 billion earlier this year. The agreement was the largest in Walmart's history as the company seeks to position itself on the lucrative Indian market of 1.3 billion people and a fast-growing economy.
The acquisition of Flipkart was a key decision for Walmart, which continues to fight Amazon.com to capture its share of the e-commerce market, a rivalry that has grown when Walmart purchased Jet.com for $ 3.3 billion in August 2016.
(The chief executive of Amazon, Jeffrey P. Bezos, is owner of the Washington Post.)
The number of visitors to the Walmart website rose 34 percent last year, double the growth rate of 17 percent recorded by Amazon, according to data from ComScore. But Walmart has come a long way: Amazon attracted in April an online audience of nearly 183 million visitors, against 101 million.
Walmart lowered its adjusted earnings per share guidance from $ 4.65 to $ 4.80, from an estimated range of $ 4.90 to $ 5.05. Refinitiv, a Thomson & Reuters company that estimates financial risk for investors, has forecast Walmart adjusted earnings per share of $ 4.79.
Although the Flipkart deal may be expensive for Walmart in the near term, analysts said the company's efforts to enter the Indian online market could have potential for "explosive growth online."
"While Walmart spends a lot on this growth and the deal may not be profitable for some time, revenues are likely to take off," Moody analysts wrote in August. "The Indian market is comparable to the US online sales market, which accounts for about $ 600 billion in sales. In addition, the retail trade in India is not as developed as the United States, which reinforces the importance of the online connection. "
For the fiscal year 2020, the company expects sales growth in the United States to grow by 3% or more, and that same-store sales growth in the United States will increase by 2.5% to 3%.
"I am delighted with Walmart's position in this rapidly changing retail landscape," said Brett Biggs, Chief Financial Officer, Chief Financial Officer, in a press release. "We are leveraging our scale, assets and financial strength in a unique way at Walmart to enhance and create competitive advantages."
Walmart, which held its annual shareholder meeting Tuesday, also announced plans to open more than 300 new stores abroad next year, focusing on China, Mexico and Central America.
At the shareholders' meeting, Walmart executives presented a vision of the future of the company, which strayed from the history of brick and mortar, with a largely poor clientele driven by the lowest prices. lowest in society. In the years to come, Walmart's businesses will be much more personalized and focused on customers' online experiences, with an eye on emerging markets and the richest consumers.
Customer Service Manager Janey Whiteside focused on Walmart's efforts to appeal to high-end consumers through new brands for Walmart – the Eloquii Big Clothes brand, the clothing line for Bonobos men and ModCloth online clothing retailer. According to Whiteside, it is essential to take advantage of the millennia, especially of high-income people living in urban areas.
"Our customer base is expanding," said Whiteside. "As we build omnichannel convenience and add new brands and services, we will continue to focus on them."
Marc Lore, president of e-commerce Walmart (and founder of Jet.com), told investors that it is essential to attract more premium brands to attract these new customers, as well as recent changes to Walmart .com, designed to make the market more attractive. more modern and personalized site. Same day delivery is also an integral part of the company's online strategy, said Lore, estimating that 40% of Americans would have access to Walmart's same-day delivery within the next year.
Lore and Whiteside both spoke of the future of conversational commerce: shops where customers chat online with employees (or AI-led representatives) online for specific product recommendations. Already, Walmart's Concierge Service, Jetblack, offers SMS recommendations, orders and same-day delivery to Manhattan customers.
"I think it's the future of how people go shopping," Lore said.
Other topics discussed at the meeting will include the company's efforts to reduce vendor emissions, machine machine learning throughout operations, and the use of the record cryptography blockchain for security. and its plans to develop its e-commerce.
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