Walmart's Q4 shows strong growth in its grocery pickup and delivery services

Walmart said grocery comp sales were the best in nine years.

Walmart on Tuesday reported better-than-expected fourth quarter financial results bolstered by a strong performance during the holiday period. The world's largest retailer said fourth quarter comparable sales grew 4.2 percent in the quarter that included Christmas, beating expectations. 

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Online sales jumped 43 percent during the quarter. Walmart attributes the growth to the expansion of its online grocery pickup and delivery services and a broader product assortment on its website. 

On a two-year stack basis, Walmart said grocery comp sales were the best in nine years. The company said it added about 1,000 grocery pickup locations and that pickup and delivery are now available in more than 2,100 and nearly 800 locations, respectively. 

Overall, Walmart wrapped up 2018 with online sales growth of more than 40 percent. The results line up with the company's broader omnichannel efforts and plans to ramp up grocery delivery as it battles Amazon.

As for the numbers, Walmart reported net income of $3.69 billion, or $1.27 a share. Revenue climbed $2.5 billion to $138.8 billion with non-GAAP earnings of $1.41 a share. Analysts expected revenue of $138.65 billion and earnings of $1.33 a share. Looking to the full year, Walmart's revenue was $514.4 billion with EPS of $4.91, which also beat estimates. Shares of Walmart were up about 2 percent in early trading.

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As for guidance, Walmart is reiterating the full-year sales and profit guidance it gave in October, with same-store sales growth at US Walmart stores of between 2.5 and 3 percent, slightly down compared to the fiscal year that just wrapped. 

"Progress on initiatives to accelerate growth, along with a favorable economic environment, helped us deliver strong comp sales and gain market share," said Walmart chief executive Doug McMillon. "We're excited about the work we're doing to reach customers in a more digitally-connected way. Our commitment to the customer is clear - we'll be there when, where and how they want to shop and deliver new, convenient experiences that are uniquely Walmart."