Will Jet.com Save Walmart From Amazon’s Fury?

Photo Credit: Mike Mozart

Wal-Mart Stores, Inc. (WMT) Consumer Discretionary - Food & Staples Retailing | Reports August 18, Before Market Opens

Key Takeaways

  • The Estimize consensus is calling for earnings per share of $1.04 on $120.35 billion, 2 cents higher than Wall Street on the bottom line and $250 million on the top
  • Walmart recently acquired Jet.com in an effort to take on Amazon in dominance for online retail
  • Fresh food and groceries continues to be the upperhand Walmart has over online retailers
  • What are you expecting for WMTGet your estimate in here!

Walmart is prepared to announce its fiscal second quarter earnings early tomorrow morning. The world’s largest retailer is coming into its report on a high note after agreeing to purchase Jet.com for $3.3 billion earlier this month. This marks the largest purchase to date of an e-commerce startup. Clearly the move is intended to help WMT catch up with online giant Amazon which continues to outpace the overall retail sector. That isn’t to say Walmart is doing poorly. The company is coming off a better than expected first quarter with expectations for another one tomorrow.

Analysts at Estimize are calling for earnings per share of $1.04, 4% lower than the same period last year. That estimate has increased 3% since Walmart’s most recent report in May. Revenue is anticipated to come in flat at $120.35 billion, consistent with the improving trends in the retail environment. Shares are up 18% year to date but historically have declined by 1% following a report. 

It has been no secret that Walmart is trailing Amazon as an ecommerce retailer. Its acquistiion of Jet.com is a direct message to Amazon that they are coming for them. Most experts don’t believe Jet’s platform will close the gap but moving Marc Lore to lead its e commerce efforts might help. Last quarter online sales rose a sluggish 7%, consistent with the slowdown over the last year. Along with boosting online sales the company is focused on creating a better customer experience and lowering prices even further. These initiatives might generate sales but it will also pressure margins.

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Alpha Stockman 3 years ago Member's comment

While I agree that #Walmart clearly needs to enhance its ability to innovate to better compete with #Amazon, I'm still baffled as to why they think #Jet is the answer. I've used both sites and Jet is no Amazon. Doesn't come close. $WMT $AAPL

Roland Murphy 3 years ago Member's comment

$WMT is so far behind the times, any added tech can only help its e-commerce efforts. Acquiring #Jet is a move in the right direction. But the pairing will not be a case of 2+2 equals 5, and they still will be no match for $AMZN. Not too mention, trying to integrate the two sites likely be worse than the ObamaCare site snafu.

Terrence Howard 3 years ago Member's comment

I agree. #Amazon ($AMZN) is exceptionally innovative. #Walmart ($WMT) is exceptionally behind the times (any one who has ever used instore pickup knows what I mean - waiting an hour for someone to visually check each box for your name since they have no tracking technology). But #Jet is decidedly average. The pairing won't help Walmart much.