Swallowing $16B purchase of Flipkart, Walmart cuts outlook
Posted Oct 16, 2018 06:15:17 PM.
Last Updated Oct 16, 2018 07:00:33 PM.
This article is more than 5 years old.
BENTONVILLE, Ark. – Walmart trimmed its profit outlook citing this year’s $16 billion acquisition of the Indian online retailer Flipkart, its biggest deal ever.
The company also said on Tuesday that U.S. online sales growth would slow to 35 per cent, from last quarter’s 40 per cent growth.
Since buying Jet.com for more than $3 billion two years ago, Walmart has been bulking up online, buying companies such as Bonobos and ModCloth. It’s also tried to speed up deliveries while expanding same-day grocery delivery.
The company says its online grocery pickup service is attracting new customers and shoppers are adding more items to their cart because of it.
Walmart also announced a partnership with Advance Auto Parts, which will create an automotive specialty store on Walmart.com. The online store is expected to be rolled out in the first half of next year. In a joint release, the companies said they plan to work together to explore such services as home delivery and same-day pickup in a Walmart or Advance store. The Roanoke, Virginia-based Advance Auto Parts operates nearly 6,400 stores.
Walmart Inc. now expects 2019 adjusted earnings of between $4.65 and $4.80 per share, down from $4.90 to $5.05.
Shares rose more than 2 per cent, or $1.93, to $95.75 in afternoon trading.
