Wal-Mart Stores Inc (NYSE:WMT) announced on Tuesday that it expects its online sales within the U.S to surge by 40 percent in the coming fiscal year.
The announcement about the forecasted of 40 percent growth in sales led to a positive reaction by the company’s investors, causing the stock to surge to the highest point that it has been over the past two years. The company believes that its net sales will grow by roughly 3 percent before the end of 2019. Wal-Mart executives also revealed the firm’s plan to repurchase $20 million of stock over the next 24 months.
“We are going to lean into places like technology, e-commerce, international stores,” stated Brett Biggs, the Chief Financial Officer of Wal-Mart.
Biggs made the remarks during the company’s annual investor meeting which was held in Bentonville, Arkansas. The announcement about Wal-Mart’s online sales is a highlight of the retail firm’s desire to take the fight to online retail giant Amazon.com, Inc. (NASDAQ:AMZN). The idea is to take a bigger piece of the online retail market, thus competing more effectively with its rivals.
One of the strategies that Wal-Mart has already implemented as part its online growth plan is the free two-day shipping. The company also announced that it plans to add more locations so that it can fulfill all its shipping orders, especially for its online groceries business. Wal-Mart also announced on Monday that it intends to speed up the process of in-store returns for products purchased online.
Wal-Mart did not reveal the e-commerce sales numbers of 2016 but it expects its online sales for the fiscal year ending 2018 to hit the $11.5 billion mark. Online shopping has been rapidly gaining in popularity and Wal-Mart is one of the companies that have benefited significantly from this shift. The firm online slowly has been outperforming sales from its brick and mortar stores. This has also influenced the decision to pause the launch of more physical stores to focus on the opportunities presented by online retail.
Wal-Mart stock closed the latest trading session on Tuesday at $84.13 after a 4.47 percent gain compared to the value of the stock during the previous close.