Why the retailer slashed its sales forecast.
Walmart has described fiscal 2016 as a year of investment, operational improvement and change, with increased investment in higher wages, better training, more department managers, and store closures. These factors have contributed to a total revenue decline of 1.4% to $129.7 billion and a 17.1% tumble in operating income to $5.1 billion, according to the company.
However, comparative sales at Walmart US were positive for the sixth consecutive quarter, up 0.6% driven by positive foot traffic. Meanwhile, e-commerce sales and gross merchandise value (GMV) increased approximately 8% on a constant currency basis, although growth was pressured primarily by challenges in key international markets.
Walmart CEO and president, Doug McMillon (pictured above) said in a statement to the Australian Securities Exchange (ASX), “We are seeing momentum in our Walmart US business as we continue to lap positive comps, and our international business is healthy and growing. We are pleased with fundamental trends that are allowing us to improve our stores, add critical capabilities and deepen our digital relationships with customers.”
The company expects currency exchange fluctuations, based on current exchange rates, to negatively impact net sales by approximately $12 billion for fiscal year 2017. Net sales growth is expected to be relatively flat, reflecting the impact from store closures globally, as well as the continued strengthening of the US dollar.