How Does WAL-MART Respond To Amazon'S Challenge?

According to the world clothing and shoe net, the largest retailer in the world before the US stock market on Tuesday, February 19th.

The results of the 2019 financial year's four seasons and annual reports were better than those expected by Wall Street.

The report shows that the weight is heavy at the end of the year.

In the fourth quarter of the quarter, WAL-MART adjusted earnings per share (EPS) of US $1.41, which was higher than the US $1.34 expected by the market.

Season

Business grew by 43% over the same period last year, and the growth rate was flat in the previous quarter.

WAL-MART expects that electricity business growth will remain at a high level of around 35% this year.

WAL-MART's four quarter quarter includes Thanksgiving, Christmas and the shopping peak associated with it. Its outstanding performance is at least the best in nearly ten years.

Wall Street's exclusive members mentioned that last week, the US retail sales in December dropped by 1.2%, the largest monthly decline in more than nine years. The data collected during the holiday shopping season made Wall Street analysts suspect that the data were wrong.

Peng Bo reported that WAL-MART's same store sales in the four quarter increased by 4.2% year-on-year, the biggest increase in the holiday season for at least ten years.

In the four quarter of 2017, WAL-MART's electricity business revenue increased by 23% compared to the same period last year, almost half of the same period last year.

The core of WAL-MART's electricity business strategy, which accounts for a large part of the company's total sales, is a median digits growth in daily grocery business.

Moodie, chief retail analyst at Charlie O'Shea, commented that WAL-MART has clearly answered the question of how to pition to online. They are not building physical stores, but are investing capital expenditures into technology and electricity providers.

After the announcement of the earnings report, WAL-MART's stock price rose 4% before the day, and it opened higher on the same day. It rose 104 dollars in the day and rose more than 4% in the day. It hit a new high in the intraday market since November 13th last year, and eventually closed up 2.21%, closing at $102.20, closing the same high level since last November 13th.

Electricity business performance eye-catching revenue continued to grow

In the 2019 quarter of fiscal year, WAL-MART's revenue reached US $138 billion 800 million, an increase of US $2 billion 500 million or 1.9% compared with the same period last year. WAL-MART's revenue in the previous quarter was 140 billion 500 million US dollars, representing an increase of 3.1% over the previous year.

Fourth quarter, WAL-MART's electricity business grew 43% over the same period last year, the growth rate was unchanged from the previous quarter.

WAL-MART's sales growth in the United States has seen its strongest growth in nine years, and WAL-MART's e-commerce business is also gradually advancing along with the expansion of distribution networks and the optimization of WAL-MART's shopping website.

The sales of Sam's member stores increased by 3.3% compared with the same period last year, and its electricity business grew by 21%.

WAL-MART International's sales in the four quarter were 32 billion 300 million US dollars, down 2.3%, and its sales volume was 34 billion USD, up 2.7% compared to the same period last year.

WAL-MART's adjusted EPS does not include the $0.17 write off of tax reform, nor does it include the earnings per share of $0.03 per share invested by Jingdong.

From the past fiscal year, WAL-MART's revenue was $514 billion 400 million, an increase of 2.8% over the same period, and its revenue was $515 billion 100 million, an increase of 3% over the same period last year.

Sales of WAL-MART America increased by 3.6% in the past fiscal year.

There are more than 2100 self-service delivery points, and distribution services have been carried out in over 800 American towns.

WAL-MART's electricity business grew 40% throughout the year.

In addition, the company has a free cash flow of $27 billion 800 million, which repaid shareholders $13 billion 500 million through dividends and repurchase last year.

WAL-MART president and CEO Doug McMillon said:

The past year has been a good year for WAL-MART.

I want to thank all those who work with us. They make our customers get better service every day. We are making progress in accelerating growth and gaining more market share.

We are trying to connect customers with us in the digital age.

Our commitment to customers is also clear: we are always at your side whenever and wherever you are; you will get a brand new and convenient shopping experience in WAL-MART.

2020 fiscal year: electricity providers will grow by about 35%.

For the outlook for the 2020 fiscal year, WAL-MART said it will achieve sales growth of at least 3 percentage points. The positive factors that may affect growth include mainly the acquisition of Flipkart for India's e-commerce platform. However, the sale of WAL-MART Brazil company and restrictions on tobacco sales in Sam's member stores can have a negative impact on WAL-MART's growth.

In the US, WAL-MART looks forward to sales growth of 2.5% to 3% (excluding energy sales); sales of Sam's member stores have increased by about one percentage point (excluding energy sales); overall, energy and tobacco sales have increased by about 3%.

WAL-MART hopes to achieve an increase of about 35% of the US electricity supplier in the next fiscal year. The US delivery point will be expanded to about 3100, and the distribution business coverage will be expanded to about 1600.

WAL-MART hopes that growth in the international market will reach 5% in the next fiscal year.

How does WAL-MART respond to Amazon's challenge?

As the world's largest retailer, WAL-MART has been hit by Amazon, an e-commerce giant, in recent years.

When Amazon seized more and more markets, WAL-MART came up with many tricks to deal with it.

First of all, WAL-MART has acquired a large number of comprehensive and vertical e-commerce platforms in the US, and is directly competing with Amazon for market space.

In August 2016, WAL-MART acquired the Jet.com of the comprehensive electricity supplier platform of the United States, and appointed its founder, Marc Lore, as the head of WAL-MART's US electricity supplier company.

Jet.com has become the most direct weapon for WAL-MART to join forces with Amazon.

After that, WAL-MART acquired the footwear business website ShoeBuy, outdoor products brand Moosejaw, Menswear ready to wear Bonobos, furniture business Hayneedle, fashion women's brand ModCloth and so on, and its electric commodity category was significantly improved.

Second, WAL-MART is cooperating with Amazon's competitors in the us to try to "encircle Amazon".

For example, WAL-MART has worked with Deliv, a distribution company invested by Google, to complete the distribution of WAL-MART online goods online (but this cooperation has been terminated). In addition, WAL-MART has several agreements with a number of distribution companies, in order to realize its own "electricity supplier dream".

In July last year, WAL-MART also announced that it plans to pfer all its cloud services to Microsoft Azure cloud services and Office 365, and renew a five year cooperation agreement with Microsoft to jointly implement artificial intelligence projects.

(in the cloud computing market, Microsoft is the main competitor of Amazon.

According to its cooperation agreement, Microsoft is expected to help WAL-MART create an unmanned convenience store and compete with Amazon Amazon Go unmanned convenience store.

Third, overseas, WAL-MART has also worked closely with local businesses to try to compete directly with Amazon in overseas markets.

In the middle of last year, WAL-MART acquired cornershop, which mainly covered Mexico and Chile's e-commerce platform.

WAL-MART has also invested in Jingdong and acquired No. 1 store in China, and launched the Sam member online shopping mall in China.

In India, WAL-MART will complete the acquisition of Flipkart, a local e-commerce platform this year.

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