Wal-Mart Stores Inc highlighted strong gains in its e-commerce business that boosted US sales, winning plaudits from Wall Street on Thursday after other retailers released disappointing earnings.
The world’s biggest retailer is accelerating efforts to “combine our digital and physical assets to make our shipping simple and easy for customers,” CEO Doug McMillon said in a statement. “Our customers have choices, and we have to earn their business with every interaction.”
Wal-Mart has been pumping funds into improving its in-store experience, upgrading stores and boosting worker pay, at the same time that it has been building out its e-commerce business.
The costs of those initiatives have pressured earnings in recent quarters, and the company reported earnings of US$3 billion in the first quarter of fiscal 2018, down 1.3 percent from the same period last year. Revenue was up 1.4 percent at US$117.5 billion.
However, the initiative has produced gains in comparable store sales in the US, a closely watched benchmark that rose 1.4 percent in the first quarter.
E-commerce sales surged 63 percent and merchandise volume saw a 69 percent jump.
Analysts at Global Data Retail said Wal-Mart’s sharp focus on keeping prices down in grocery was winning some customers back and described growth in e-commerce as evidence of a business “in the ascendancy.”
“Overall, this is an encouraging start to the year for Walmart,” GlobalData Retail said in a research note. “This is one US retailer that is ahead of the curve in responding to the evolving landscape.”
Wal-Mart shares gained US$2.42, or 3.2 percent, to close at US$77.54 on Thursday.
Wal-Mart has boosted its online offerings to 50 million items, up five-fold from a year ago, Walmart eCommerce US president and CEO Marc Lore said.
“There’s more product to buy, you’re able to get the product quicker,” Lore said in a conference call with reporters. “The overall experience is improving.”
The gains followed a number of Wal-Mart acquisitions over the past year, although executives described the majority of the growth as “organic.”
Wal-Mart’s financial reports do not provide a breakdown of revenue for e-commerce sales.
Chief financial officer Brett Biggs said e-commerce is “still fairly small” within Wal-Mart’s US business and there was no immediate plan to disclose more details about the business.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to