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Add another item to the yawning list of worries on the plate of Amazon (AMZN) CEO Jeff Bezos.
A not so small Bentonville, Arkansas-based company called Walmart (WMT). If Bezos — who is dealing with thorny personal problems and a major PR flub in pulling out of opening a new HQ in New York City — forgot about Walmart in pursuit of retail dominance, he may want to pull up the company’s latest financial results.
Not only does Walmart’s blowout fourth quarter results indicate the Sam Walton’s brick-and-mortar creation is surviving in the age of Amazon, but it’s flat-out starting to take business from the Bezos beast.
Walmart’s fourth quarter earnings came in at $1.41 a share, ahead of Wall Street estimates for $1.34 a share. Revenue of $138.8 billion slightly surpassed consensus expectations.
Walmart shares popped about 5% in pre-market trading Tuesday.
But it was the strength throughout the report — and slowing growth at Amazon during the fourth quarter — that suggests Walmart is starting to win the battle against Amazon. Credit for that goes to a better web shopping experience, an online grocery push, and years-long efforts to slash prices for consumers.
Here are several noteworthy numbers from Walmart’s quarter:
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Walmart U.S. same-store sales rose 4.2%, ahead of forecasts for 3.3% growth. The business saw its e-commerce sales surge 43% year over year for the second straight quarter. Grocery same-store sales rose by a mid-single digit percentage. Same-store sales gained in all three business segments: grocery, health and wellness and general merchandise.
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Sam’s Club same-store sales increased 3.3%. The segment’s e-commerce sales rose 21%. Seeing as the Sam’s Club shopper is often the Amazon Prime user (higher income willing to pay for a membership), the comeback of Sam’s Club after years of struggles is noteworthy.
“Progress on initiatives to accelerate growth, along with a favorable economic environment, helped us deliver strong comp sales and gain market share,” CEO Doug McMillon said.
Retail pros are beginning to notice the likes of Walmart and Target running better businesses and what that means for Amazon.
“Amazon should be having trouble sleeping at night,” former Apple retail store chief and J.C. Penney CEO Ron Johnson told Yahoo Finance. “I mean, seriously. Amazon same-store sales in the U.S. are now single-digit. Target and Walmart, these big retailers have learned how to leverage their stores’ inventory to create a better shopping experience. That’s where customers are going right now.”
Is everything perfect at Walmart right now? No. For one, the company’s gross profit margins at Walmart U.S. continue to be under pressure due to more competitive prices and the shift to online shopping (think the impact of shipping costs). But Walmart is doing more than enough to signal to investors that it could win business from Amazon.