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Walmart (WMT) Opens New Fulfillment Center Before Holiday Season

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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 its facilities. The retail behemoth announced the opening of a 1.1 million-square-foot Next Generation fulfillment center (FC) in Joliet, IL.

The Joliet FC, the first of four next-gen FCs, will start operations ahead of the holiday season to support next or two-day shipping to customers in Illinois, Indiana and Wisconsin. Walmart FCs store millions of products sold on Walmart.com, which are picked, packed and shipped directly to customers. Also, the new state-of-the-art FCs will fulfill Marketplace products shipped by Walmart Fulfillment Services (WFS) and the company’s end-to-end fulfillment service for third-party e-commerce sellers.

Earlier this year, Walmart announced four next-gen FCs featuring a new patent-pending process fueled by people, robotics and machine learning combined. The system will streamline a manual 12-step process into five steps, namely unload, receive, pick, pack and ship.

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Walmart’s Holiday Season Initiatives on Track

Last week, Walmart revealed plans to employ about 40,000 seasonal and full-time workers ahead of the shopping season. The company will also offer additional hours to its existing workers. Walmart is making solid price investments across key categories to offer great value to its customers. It is also offering more rollbacks to boost savings on gifts like toys, electronics, beauty and home, to name a few.

The omnichannel retailer has enriched its holiday gift assortment with increased options this season and has included new brands and additional Walmart exclusives. The company has invested in the core gifting categories and strengthened its inventory for popular electronics like TVs, tablets, watches, wireless headphones, wireless phones, along with home goods like furniture, decor, appliances and robotic vacuums.

Walmart is also making efforts to ease the returns process, as part of which it announced that Walmart+ members could avail of new return options, including Holiday Guarantee, Curbside Returns and Return Pickup from Home, starting October. The company is focused on making customers’ omnichannel shopping more convenient through a better site experience, personalized shopping (through virtual try-on and "View In Your Home," options), fast and easy pickup and delivery services, refreshed holiday wish lists, and a registry suite.

We believe that the newly opened state-of-the-art FC will aid Walmart in providing a more seamless customer experience during the upcoming holiday season. The Zacks Rank #3 (Hold) company’s stock has gained 9.5% in the past three months compared with the industry’s 6.3% growth.

Solid Retail Bets

We have highlighted three better-ranked stocks, Ulta Beauty (ULTA - Free Report) , Kroger (KR - Free Report) and DICK'S Sporting Goods, Inc. (DKS - Free Report) .

Ulta Beauty, which operates as a retailer of beauty products, sports a Zacks Rank #1 (Strong Buy). Ulta Beauty has a trailing four-quarter earnings surprise of 32.8%, on average. ULTA has an expected EPS growth rate of 11.9% for three to five years. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Ulta Beauty’s current financial year sales suggests growth of 13.7% from the year-ago reported number.

Kroger, a renowned grocery retailer, currently carries a Zacks Rank #2 (Buy). KR has an expected EPS growth rate of 11.7% for three to five years.

The Zacks Consensus Estimate for Kroger’s current financial year revenues and earnings per share (EPS) suggests growth of 7.8% and 9.8%, respectively, from the year-ago reported figure. KR has a trailing four-quarter earnings surprise of 15.7%, on average.

DICK'S Sporting, which operates as a sporting goods retailer, carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of nearly 21.4%, on average.

The Zacks Consensus Estimate for DICK'S Sporting’s current financial year earnings per share has risen from $11.33 to $11.42 in the past 30 days. DKS has an expected EPS growth rate of 5% for three to five years.


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