Walmart expects its U.S. sales momentum will continue next year both in stores and online.
The Bentonville, Ark.-based retailer on Oct. 16 released preliminary guidance for its fiscal 2020, or the 12 months beginning in February, calling for U.S. comps to increase between 2.5% and 3% and online sales to increase by 35%. The company expects that grocery pickup would be available at 3,100 stores and delivery at 1,600 as its investment will once be focused on store remodels, e-commerce and technology. Its $11 billion projected capital budget contemplates fewer than 10 new stores.
Walmart is expected to spend around the same on capital projects this year while building less than 15 stores. Walmart expects U.S. comps this year of around 3% and e-commerce sales growth of 40%. The company raised its comp guidance in August after blowing past expectations of U.S. sales in its fiscal second quarter.
“We’re adapting and transforming with speed to better serve our existing customers and reach new ones,” Walmart President and CEO Doug McMillon said in a statement. “We’re operating with discipline, balancing our short- and long-term opportunities. While we’re excited about what we’ve done so far, we aren’t satisfied. As we execute today and build for tomorrow, our associates and unique omnichannel assets position us for success.”
The company expects to post slight declines in operating income and in earnings per share in fiscal 2020, primarily as a result of its investment in the money-losing Indian e-commerce company Flipkart. Excluding those results, earnings and operating income would be positive in the fiscal year.
The Flkipkart investment also resulted in a revision to the company’s current-year earnings expectations, although that had been expected.
The remarks came as Walmart hosted an event for financial analysts and investors in Bentonville on Oct. 16.