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Walmart expects online sales of 30-40% CAGR through 2018

17 Oct '14
2 min read

The world’s biggest retailer - Walmart Stores expects an increase in global e-commerce sales of around 25 percent in fiscal year 2016, and anticipates growth over the three-year period from fiscal years 2016 through 2018 to average 30 to 40 percent.

Charles Holley, Walmart’s CEO outlined the company’s financial priorities for growth and detailed investment and expansion plans for fiscal year 2016.

“Our business and customers continue to evolve and so will the way we deploy capital. We will invest more heavily in e-commerce initiatives, while temporarily moderating our global physical growth, particularly larger stores,” Holley explained.

“Globally, we expect to finish this year with approximately $12.5 billion in e-commerce sales,” said Holley.

Holley added, “The greatest investment of capital and in operating loss for our e-commerce operations will come over the next 18 to 24 months, and then we would expect to see that investment start to moderate in fiscal 2018.”

Walmart unveiled its capital expenditure plans for the next fiscal year ending January 31, 2016, under which it will spend between $11.6 and $12.9 billion, including between $1.2 to $1.5 billion on e-commerce and digital initiatives.

“This is below the updated range for fiscal year 2015 of $12.5 to $13.0 billion, due to the change in mix of spending toward more digital growth and a moderation of physical store growth,” Walmart said.

The retailer also indicated that as a result of a tougher than anticipated sales environment, it downwardly revised its estimates and now expects sales for the current fiscal year to grow between 2 and 3 percent on last year’s $473.1 billion.

Earlier in February of this year, Walmart had said that it expected net sales growth to be at the low end of its guidance provided last October of between 3 to 5 percent.

Walmart will add between 26 and 30 million net retail square feet worldwide next year, down from this fiscal year’s anticipated 32 to 34 million square feet, due to a moderation of large format store growth and accelerated e-commerce investments.

Wal-Mart Stores CEO Doug McMillon said, “We’ll change the mix of our capital spend next year to provide greater access, while continuing to focus on price leadership, service, and a broad assortment.” (AR)

Fibre2fashion News Desk - India

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