Wal-Mart’s shares fell 9.4 percent after the retailer announced that it experienced a drop in both profit and online sales growth over the holiday period, according to a report published by Reuters.
The retailer’s online sales growth dipped to 23 percent in the fourth quarter of the financial year, compared to 50 percent in the third quarter and 29 percent in the same period of fiscal 2016. Arch rival Amazon reported sales growth of 40 percent for the final quarter of 2017.
Analysts pointed to Wal-Mart’s struggle to maintain inventory during the crucial holiday period as well as its price war with Amazon, which saw the retailer lose margin. Wal-Mart forecast earnings of US$4.75 to US$5 per share for 2018.
However, US store sales grew 2.6 percent, above expectations and marking three consecutive years of US growth – an achievement in the current climate that no other US retailer can lay claim to, says Reuters.
“We have good momentum in the business and solid sales growth across Wal-Mart US, Sam’s Club and International,” said Doug MacMillion, President and CEO, Wal-Mart. “We’re making real progress putting our unique assets to work to serve customers in all the ways they want to shop, and I want to thank our associates for their great work this past year. We’re making decisions to position the business for success and investing to win with customers and shareholders.”