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Walmart sees e-commerce growth of about 35 percent for fiscal 2020

The retailer's annual analyst confab will have a heavy dose of technology plans and e-commerce growth projections.
Written by Larry Dignan, Contributor

Walmart said its fiscal 2020 e-commerce revenue growth will be about 35 percent, as the company balances omnichannel bets with current profits.

The retailing giant is holding its annual analyst get-together with CEO Doug McMillon and other executives. McMillon noted the company can leverage its "unique omnichannel assets" to grow.

Walmart has been investing its logistics, e-commerce capabilities and acquisitions such as Flipkart. The company is also using its heft to boost assortment and keep prices low.

The company also said that 3,100 stores will have grocery pickup and 1,600 will have grocery delivery by end of the fiscal 2020. Walmart recently reported second quarter fiscal 2019 results.

As for the outlook, Walmart said overall sales growth will be about 3 percent in constant currency with Walmart US same store sales about 2.5 percent to 3 percent. E-commerce sales growth will be about 35 percent.

McMillon outlined a bevy of innovations and technology moves by Walmart in recent years. He also outlined how Walmart is looking to build an ecosystem that adds up to a omnichannel retail flywheel. A graphic in McMillon's 45-slide presentation highlighted what Walmart is ultimately going for as it competes with Amazon.

walmart-ecosystem.png


Mark Lore, Walmart's e-commerce chief, walked through the strategy and made the following points:

  • E-commerce sales for Walmart U.S. is estimated to top $15 billion for fiscal 2019.
  • The company is working on fundamentals such as having the right inventory, enabling customers to find it, low prices and delivering it as fast as possible. These moving parts add up to CVI, which stands for Walmart's customer value index.
  • Walmart has added 40 to 50 new SKUs each month, launched a next-gen dashboard and added 2,000 new brands to the site.
  • Delivery variable cost per unit has improved 10 percent.
  • About 60 percent of Walmart's customer base will have same day delivery in fiscal 2020.

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Walmart added that earnings will decline by low single digit percentage rate relative to adjusted fiscal 2019 results. International growth will be up about 5 percent with help from the Flipkart purchase.

According to Walmart, capital spending for fiscal 2020 will be about $11 billion with store remodels, e-commerce, technology and supply chain big ticket items.

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