An earnings miss over the key holiday season sent Wal-Mart Stores, Inc (NYSE:WMT) shares lower in pre-market trading on Tuesday, but the company’s fourth-quarter results showed that the big-box retailer is succeeding in its challenge to keep up with Amazon.com Inc (NASDAQ:AMZN).
The stock dropped almost 5% early on Tuesday morning to US$99.72 as Wal-Mart reported adjusted earnings of US$1.33 - just below the US$1.37 analysts had been expecting.
READ: Wal-Mart shares surge as it raises profit guidance and reports third quarter revenue growth
Total sales beat estimates
But the Arkansas-based retailer beat estimates with its sales, which climbed 4.1% to US$136.3bn. Wall Street number crunchers had initially pencilled in US$134.9bn.
Same-store sales - a key industry metric that strips out the effect of newly opened and closed stores - rose 2.6% over the three-month period, compared to expectations of a 2.2% jump.
Perhaps the most promising results came in the form of e-commerce sales, though.
Wal-Mart - along with a host of other retailers - has been trying to up its game in this field to compete with industry giant Amazon.
The company has been steadily building its online presence with the acquisitions of niche e-commerce sites such as Bonobos, while it has also been actively encouraging its customers to order online and then pick up their items in store, something it sees as a key advantage.
Online sales up 44% in 2017
Online sales rose 23% in the final quarter of 2017, and 44% across the year as a whole.
Wal-Mart is guiding for e-commerce sales growth of another 40% or so over the coming year, as well.
As for the rest of its forecasts, the retailer is targeting earnings of between US$4.75 and US$5.00 in fiscal 2019, while it expects same-store sales growth of 2% in its Wal-Mart outlets and up to 4% at its Sam’s Club locations.
Last month, the company said it would raise its minimum hourly wage to US$11 on the back of President Trump’s tax cuts, although it also announced the closure of 63 Sam’s Club stores to tighten its cost base.