August 15, 2014, 12:40 PM

Wal-Mart lowers its guidance on web sales

With online sales up 24% in its fiscal second quarter from the prior quarter, the mass merchant says its e-commerce business will grow 25%, instead of 30%, in its fiscal year ending Jan. 31, 2015.

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The web sales of Wal-Mart Stores Inc. grew 24% in its fiscal second quarter ended Aug. 2, down from 27% growth in the first quarter. The mass merchant announced on a conference call with investors that it is now estimating web sales growth of 25% for the fiscal year, down from its original estimate of 30% growth. Wal-Mart’s current fiscal year ends Jan. 31, 2015.

“Although we are slightly revising our e-commerce sales growth to 25% for this year, we continue to be very encouraged by the progress we are making on our strategic goals,” said Charles Holley, chief financial officer, on a second quarter earnings call with investors, according to a transcript from Seeking Alpha

Globally, Wal-Mart’s web properties saw high growth. The web sales in Canada and Argentina grew by triple digits,  and double digits in Brazil, Mexico and Chile. In China, Yihaodian—the company’s e-commerce platform there—grew traffic in the second quarter by triple digits. Net sales grew by double digits. E-commerce sales in the United States and the United Kingdom also grew by double digits.

“We are very excited about the innovation and growth in our e-commerce businesses around the world,” Greg Foran, president and CEO of Wal-Mart U.S., said during the conference call. “As I mentioned earlier, Mexico celebrated the first anniversary of Wal-Mart.com.mx in June. Traffic grew to nearly triple last year’s volume, positioning Wal-Mart.com as one of the fastest growing e-commerce retail businesses in Mexico and the third most visited, according to comScore.” ComScore Inc. is a provider of web traffic data.

The company also announced it will invest $240 million to $340 million in its e-commerce operations this year, which is above previous guidance for $100 million to $200 million. Much of that investment will go toward its new fulfillment center in Indiana.

 

For the fiscal second quarter ended Aug. 2, Wal-Mart reported:

  • Global e-commerce sales grew 24%.
  • Total net sales increased 2.8% to $119.34 billion from $116.09 billion.
  • Comparable-store sales for Wal-Mart locations in the U.S., including gasoline sales, stayed the same.
  • Comparable-store sales for all U.S. locations, including Wal-Mart and Sam’s Club with fuel sales, grew 0.1%.
  • Net income increased 3.4% to $4.359 billion from $4.215 billion.

 

For the six months ended Aug. 2, the chain reported:

  • Total net sales increased 1.8% to $233.50 billion from $229.37 billion a year earlier.
  • Comparable-store sales for Wal-Mart locations in the U.S., including gasoline sales, stayed the same.
  • Comparable-store sales for all U.S. locations, including Wal-Mart and Sam’s Club with fuel sales, declined 0.1%.
  • Net income decreased 0.9% to $8.085 billion from $8.160 billion.
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