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Walmart (WMT) to Add Four Fulfillment Centers to Boost Delivery
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Walmart Inc. (WMT - Free Report) is on track to transform and modernize its supply chain to add cutting-edge automation technology to the facilities. In this regard, the retail behemoth revealed plans to construct four next-generation fulfillment centers (FCs) in the coming three years. The first FC located in Joliet, IL, is expected to start operations during the summer of this year. The company expects to open one FC in McCordsville, IN, by spring 2023. Another FC is likely to start operations by 2024 in Greencastle, PA. Walmart will combine people, robotics and machine learning to enhance the speed of fulfillment at these facilities.
Walmart has associated with a tech company — Knapp — for smart fulfillment solutions to develop an automatic, high-density storage system in the buildings. The system will streamline a manual 12-step process into five steps, namely unload, receive, pick, pack and ship. We note that the company has been utilizing the system in its Pedricktown fulfillment center and seen impressive benefits. These include greater comfort for associates and double storage capacity, among others. Management aims to use the system to deliver orders quickly and efficiently to its customers.
The company highlighted that its ability to increasingly test, embed and scale automation is fueled by Walmart Control Services — a technology platform developed by Walmart Global Technology. This aids the company in partnering with automated solution providers like Knapp, Symbotic and Witron.
Image Source: Zacks Investment Research
Focus on Delivery Services
Walmart has taken robust strides to strengthen its delivery arm, as evident from its expansion of InHome delivery service; investment in DroneUp; pilot with HomeValet, introduction of Carrier Pickup by FedEx, the launch of Walmart+ membership program; drone delivery pilots in the United States with Flytrex and Zipline; and a pilot with Cruise to test grocery delivery through self-driven all-electric cars. Walmart had also unveiled an alliance with DoorDash in the third quarter of fiscal 2021 to deliver prescriptions from pharmacies of Sam’s Club, alongside expanding Scan & Go to all fuel stations at U.S. Sam’s Clubs. Prior to this, Walmart unveiled Express Delivery; joined hands with Point Pickup, Roadie and Postmates; and acquired Parcel to enhance its delivery service. Furthermore, the company’s store and curbside pickup options add to customers’ convenience. As of the first quarter of fiscal 2023, Walmart U.S. had 4,600 pickup locations and more than 3,600 same-day delivery stores.
Wrapping Up
The industry is currently grappling with supply-chain bottlenecks and Walmart is not fully immune to these headwinds. The Zacks Rank #4 (Sell) company posted soft first-quarter fiscal 2023 earnings, as it battled supply-chain bottlenecks, escalated costs and persistently elevated inflation. The company’s consolidated gross profit margin contracted by 87 basis points (bps), primarily due to Sam’s Club, wherein the gross margin fell 219 bps. This was attributable to supply-chain costs, a fuel mix, inflation and markdowns stemming from the delayed inventory. Management expects the gross margin to remain under pressure in the second quarter, though it will likely improve sequentially.
WMT’s stock has declined 11.6% in the past three months compared with the industry’s 11.2% fall.
Build-A-Bear, a multi-channel retailer of plush animals and related products, currently sports a Zacks Rank #1 (Strong Buy). BBW has a trailing four-quarter earnings surprise of 169.7%, on average.
Kroger, which operates food and drug stores, multi-department stores, marketplace stores and price impact warehouses, carries a Zacks Rank #2 (Buy). Kroger has a trailing four-quarter earnings surprise of 22.1%, on average. Kroger has an expected earnings per share (EPS) growth rate of 9.9% for three to five years.
The Zacks Consensus Estimate for Kroger’s current financialyear sales suggests growth of 3.2% from the year-ago period’s level.
Tractor Supply, the largest retail farm and ranch store chainin the United States, currently carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 12.4%, on average.
The Zacks Consensus Estimate for Tractor Supply’s current financialyear sales suggests growth of 8.8%, from the year-ago period’s levels. TSCO has an expected EPS growth rate of 9.8% for three-five years.
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Walmart (WMT) to Add Four Fulfillment Centers to Boost Delivery
Walmart Inc. (WMT - Free Report) is on track to transform and modernize its supply chain to add cutting-edge automation technology to the facilities. In this regard, the retail behemoth revealed plans to construct four next-generation fulfillment centers (FCs) in the coming three years. The first FC located in Joliet, IL, is expected to start operations during the summer of this year. The company expects to open one FC in McCordsville, IN, by spring 2023. Another FC is likely to start operations by 2024 in Greencastle, PA. Walmart will combine people, robotics and machine learning to enhance the speed of fulfillment at these facilities.
Walmart has associated with a tech company — Knapp — for smart fulfillment solutions to develop an automatic, high-density storage system in the buildings. The system will streamline a manual 12-step process into five steps, namely unload, receive, pick, pack and ship. We note that the company has been utilizing the system in its Pedricktown fulfillment center and seen impressive benefits. These include greater comfort for associates and double storage capacity, among others. Management aims to use the system to deliver orders quickly and efficiently to its customers.
The company highlighted that its ability to increasingly test, embed and scale automation is fueled by Walmart Control Services — a technology platform developed by Walmart Global Technology. This aids the company in partnering with automated solution providers like Knapp, Symbotic and Witron.
Image Source: Zacks Investment Research
Focus on Delivery Services
Walmart has taken robust strides to strengthen its delivery arm, as evident from its expansion of InHome delivery service; investment in DroneUp; pilot with HomeValet, introduction of Carrier Pickup by FedEx, the launch of Walmart+ membership program; drone delivery pilots in the United States with Flytrex and Zipline; and a pilot with Cruise to test grocery delivery through self-driven all-electric cars. Walmart had also unveiled an alliance with DoorDash in the third quarter of fiscal 2021 to deliver prescriptions from pharmacies of Sam’s Club, alongside expanding Scan & Go to all fuel stations at U.S. Sam’s Clubs. Prior to this, Walmart unveiled Express Delivery; joined hands with Point Pickup, Roadie and Postmates; and acquired Parcel to enhance its delivery service. Furthermore, the company’s store and curbside pickup options add to customers’ convenience. As of the first quarter of fiscal 2023, Walmart U.S. had 4,600 pickup locations and more than 3,600 same-day delivery stores.
Wrapping Up
The industry is currently grappling with supply-chain bottlenecks and Walmart is not fully immune to these headwinds. The Zacks Rank #4 (Sell) company posted soft first-quarter fiscal 2023 earnings, as it battled supply-chain bottlenecks, escalated costs and persistently elevated inflation. The company’s consolidated gross profit margin contracted by 87 basis points (bps), primarily due to Sam’s Club, wherein the gross margin fell 219 bps. This was attributable to supply-chain costs, a fuel mix, inflation and markdowns stemming from the delayed inventory. Management expects the gross margin to remain under pressure in the second quarter, though it will likely improve sequentially.
WMT’s stock has declined 11.6% in the past three months compared with the industry’s 11.2% fall.
3 Retail Stocks to Bet on
Here are some better-ranked stocks — Build-A-Bear Workshop, Inc. (BBW - Free Report) , The Kroger Co. (KR - Free Report) , Tractor Supply Co. (TSCO - Free Report) .
Build-A-Bear, a multi-channel retailer of plush animals and related products, currently sports a Zacks Rank #1 (Strong Buy). BBW has a trailing four-quarter earnings surprise of 169.7%, on average.
The Zacks Consensus Estimate for Build-A-Bear's current financial-year sales suggests growth of 10.4% from the year-ago period's reported figures. You can see the complete list of today’s Zacks #1 Rank stocks here.
Kroger, which operates food and drug stores, multi-department stores, marketplace stores and price impact warehouses, carries a Zacks Rank #2 (Buy). Kroger has a trailing four-quarter earnings surprise of 22.1%, on average. Kroger has an expected earnings per share (EPS) growth rate of 9.9% for three to five years.
The Zacks Consensus Estimate for Kroger’s current financialyear sales suggests growth of 3.2% from the year-ago period’s level.
Tractor Supply, the largest retail farm and ranch store chainin the United States, currently carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 12.4%, on average.
The Zacks Consensus Estimate for Tractor Supply’s current financialyear sales suggests growth of 8.8%, from the year-ago period’s levels. TSCO has an expected EPS growth rate of 9.8% for three-five years.