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Wal-Mart Offers Discounts on Online Orders, In-Store Pickups
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It seems that retail giant Wal-Mart Stores, Inc. (WMT - Free Report) is leaving no stone unturned to compete with brick-and-mortar rivals and e-commerce king, Amazon.com Inc. (AMZN - Free Report) . In this regard, Wal-Mart has reportedly introduced a new program wherein it is offering discounts on online items, only if shoppers pick up their orders from a nearby store. The discount given seems to be an added feature to Wal-Mart’s already existing delivery service called Walmart Pickup, which enables customers to place orders online and then pick them up at a store for free.
To start with, Wal-Mart is offering pick up discount on about 10,000 items, which will increase to more than one million items by the end of June. Interestingly, the initiative will help the company to save on logistics and will thus, have minimal impact on the cost front. Also, this move is expected to further drive its online traffic and generate healthy sales growth.
We note that Wal-Mart has been making efforts to ramp up its e-commerce business. The acquisition of Jet.com, U.S. e-commerce company, in Sep 2016 marked a major step toward accelerating its online business. The acquisition has offered customers a massive online market place where they can purchase items at discounted prices.
Then, in March, Jet.com acquired trendy online clothing seller, ModCloth. Prior to ModCloth, Wal-Mart bought Moosejaw, an outdoor apparel and gear retailer for $51 million and e-commerce shoe retailer ShoeBuy for $70 million in 2017. This move was aimed at raising the company’s stake in the online business. Further, the company is planning to create a new technology-startup incubator, called Store No. 8, in California’s Silicon Valley in order to help the company’s acquired e-commerce businesses to grow and flourish, thereby enhancing the online shopping experience.
Wal-Mart is also aggressively foraying into e-commerce in China with an aim to deliver goods from its stores around the world to consumers within hours. In Jun 2016, Wal-Mart inked a deal with JD.com to sell its Chinese e-commerce business, Yihaodian in exchange for a 5.9% equity stake in the company. In Feb 2017, Wal-Mart increased its stake in Chinese e-commerce website, JD.com Inc., to 12.1%, worth roughly $4.87 billion. This is up from the 10.8% stake it had in Oct 2016, and its 5.9% stake in June. The move was in line with the company’s aim to grab greater market share in the world’s largest online market and expand its reach in China, where it has been struggling of late.
Wal-Mart also launched its own mobile payment system called Walmart Pay in all of its 4,500-plus U.S. stores in Jul 2016. This system enables shoppers to pay through its existing smartphone app. This marks another step toward accelerating the company’s online business and making shopping easier and faster.
Wal-Mart is also aggressively trying to get a share of the pie in the online grocery shopping and delivery industry. In Jan 2017, the company started offering free two-day shipping to U.S. shoppers on a minimum order of $35 on over 2 million items. This program will replace Wal-Mart's existing two-day shipping program – Shipping Pass – that charges shoppers an annual membership fee of $49. It is interesting to note that unlike Amazon Prime (which charges customers $99 a year for two-day shipping) or Wal-Mart’s existing Shipping Pass program, shoppers does not need to pay any membership fee to avail the service. Wal-Mart also expects to expand its online grocery pickup – Walmart Grocery – from the current 600 to roughly 1,200 stores in fiscal 2018.
However, it still faces many headwinds which are likely to impact earnings in the near term. Higher expenses, lower margins at Wal-Mart U.S. and currency headwinds are expected to affect the results. Nevertheless, the company’s efforts to boost sales and regain investors’ confidence remain impressive.
Wal-Mart Stores, Inc. Price, Consensus and EPS Surprise
In fact, the stock exhibited a bullish run on the index since the past one year. We note that in the said period the stock recorded 6.2% growth, outperforming the Zacks categorized Retail-Supermarkets industry, which showcased improvement of just 2.3%. We believe there is still much value left in the stock, which is quite evident from its Value score of ‘A’, Growth score of ‘A’, Momentum score of ‘B’ and VGM Score of ‘A’.
What further makes us optimistic about its performance in the near term is its low beta of 0.13 and long-term earnings growth rate of 6.9%. Further, the retailer delivered positive earnings surprises in the past six consecutive quarters.
Zacks Rank & Key Picks from the Sector
Wal-Mart currently carries a Zacks Rank #3 (Hold).
Investors interested in the broader retail space may consider Burlington Stores Inc. (BURL - Free Report) and The Children’s Place, Inc. (PLCE - Free Report) . Both the stocks sport a Zacks Rank #1 (Strong Buy). While Burlington has long-term earnings growth of 15.85%, Children’s Place has growth rate of 8.00%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Best & Worst of Zacks
Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 ""Strong Buys"" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 ""Strong Sells."" Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>
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Wal-Mart Offers Discounts on Online Orders, In-Store Pickups
It seems that retail giant Wal-Mart Stores, Inc. (WMT - Free Report) is leaving no stone unturned to compete with brick-and-mortar rivals and e-commerce king, Amazon.com Inc. (AMZN - Free Report) . In this regard, Wal-Mart has reportedly introduced a new program wherein it is offering discounts on online items, only if shoppers pick up their orders from a nearby store. The discount given seems to be an added feature to Wal-Mart’s already existing delivery service called Walmart Pickup, which enables customers to place orders online and then pick them up at a store for free.
To start with, Wal-Mart is offering pick up discount on about 10,000 items, which will increase to more than one million items by the end of June. Interestingly, the initiative will help the company to save on logistics and will thus, have minimal impact on the cost front. Also, this move is expected to further drive its online traffic and generate healthy sales growth.
We note that Wal-Mart has been making efforts to ramp up its e-commerce business. The acquisition of Jet.com, U.S. e-commerce company, in Sep 2016 marked a major step toward accelerating its online business. The acquisition has offered customers a massive online market place where they can purchase items at discounted prices.
Then, in March, Jet.com acquired trendy online clothing seller, ModCloth. Prior to ModCloth, Wal-Mart bought Moosejaw, an outdoor apparel and gear retailer for $51 million and e-commerce shoe retailer ShoeBuy for $70 million in 2017. This move was aimed at raising the company’s stake in the online business. Further, the company is planning to create a new technology-startup incubator, called Store No. 8, in California’s Silicon Valley in order to help the company’s acquired e-commerce businesses to grow and flourish, thereby enhancing the online shopping experience.
Wal-Mart is also aggressively foraying into e-commerce in China with an aim to deliver goods from its stores around the world to consumers within hours. In Jun 2016, Wal-Mart inked a deal with JD.com to sell its Chinese e-commerce business, Yihaodian in exchange for a 5.9% equity stake in the company. In Feb 2017, Wal-Mart increased its stake in Chinese e-commerce website, JD.com Inc., to 12.1%, worth roughly $4.87 billion. This is up from the 10.8% stake it had in Oct 2016, and its 5.9% stake in June. The move was in line with the company’s aim to grab greater market share in the world’s largest online market and expand its reach in China, where it has been struggling of late.
Wal-Mart also launched its own mobile payment system called Walmart Pay in all of its 4,500-plus U.S. stores in Jul 2016. This system enables shoppers to pay through its existing smartphone app. This marks another step toward accelerating the company’s online business and making shopping easier and faster.
Wal-Mart is also aggressively trying to get a share of the pie in the online grocery shopping and delivery industry. In Jan 2017, the company started offering free two-day shipping to U.S. shoppers on a minimum order of $35 on over 2 million items. This program will replace Wal-Mart's existing two-day shipping program – Shipping Pass – that charges shoppers an annual membership fee of $49. It is interesting to note that unlike Amazon Prime (which charges customers $99 a year for two-day shipping) or Wal-Mart’s existing Shipping Pass program, shoppers does not need to pay any membership fee to avail the service. Wal-Mart also expects to expand its online grocery pickup – Walmart Grocery – from the current 600 to roughly 1,200 stores in fiscal 2018.
However, it still faces many headwinds which are likely to impact earnings in the near term. Higher expenses, lower margins at Wal-Mart U.S. and currency headwinds are expected to affect the results. Nevertheless, the company’s efforts to boost sales and regain investors’ confidence remain impressive.
Wal-Mart Stores, Inc. Price, Consensus and EPS Surprise
Wal-Mart Stores, Inc. Price, Consensus and EPS Surprise | Wal-Mart Stores, Inc. Quote
Share Price Movement
In fact, the stock exhibited a bullish run on the index since the past one year. We note that in the said period the stock recorded 6.2% growth, outperforming the Zacks categorized Retail-Supermarkets industry, which showcased improvement of just 2.3%. We believe there is still much value left in the stock, which is quite evident from its Value score of ‘A’, Growth score of ‘A’, Momentum score of ‘B’ and VGM Score of ‘A’.
What further makes us optimistic about its performance in the near term is its low beta of 0.13 and long-term earnings growth rate of 6.9%. Further, the retailer delivered positive earnings surprises in the past six consecutive quarters.
Zacks Rank & Key Picks from the Sector
Wal-Mart currently carries a Zacks Rank #3 (Hold).
Investors interested in the broader retail space may consider Burlington Stores Inc. (BURL - Free Report) and The Children’s Place, Inc. (PLCE - Free Report) . Both the stocks sport a Zacks Rank #1 (Strong Buy). While Burlington has long-term earnings growth of 15.85%, Children’s Place has growth rate of 8.00%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Best & Worst of Zacks
Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 ""Strong Buys"" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 ""Strong Sells."" Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>