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Walmart Inc. WMT is certainly going all the way to make shopping more convenient for consumers. The company, which has been making constant efforts to ace delivery services, especially amid the pandemic-led rising demand, took another step in this arena. Incidentally, the omnichannel retailer removed the minimum order requirement worth $35 for its Express Delivery service, on Mar 1.
Notably, Walmart had unveiled Express Delivery during the first quarter of fiscal 2021, which helps it deliver orders to customers in less than two hours. Customers can order products ranging from food, consumables to general merchandise assortment, including produce, toys, electronics, pantry staples and everyday essentials, without any markup. The service is presently available in roughly 3,000 stores of Walmart, reaching about 70% of the U.S. population.
Certainly, the abovementioned removal of the $35-minimum order requirement is likely to ease consumers’ experience and make Walmart’s Express Delivery service more relevant. Impressively, the service is one of the company’s various contactless pickup and delivery options. However, certain options will continue to carry the $35-minimum order requirement.
In a similar move, Walmart had removed the shipping minimum of $35 from its Walmart+ program in December 2020. The program was introduced in September 2020 with benefits like unlimited free delivery, Scan & Go options and fuel discounts. Certainly, these actions are likely to bolster Walmart’s delivery game, especially at a time when the pandemic has elevated the need for the same.
Walmart Continues to Up Delivery Game
Walmart remains committed to enriching consumers’ experiences by providing easy shopping methods and seamless grocery deliveries. In fact, the company's delivery service has become all the more vital amid coronavirus-led social distancing. Walmart has taken robust strides to strengthen its delivery arm, as evident from its pilot with HomeValet, the introduction of Carrier Pickup by FedEx, the launch of the Walmart+ membership program; drone delivery pilots in the United States with Flytrex, Zipline and DroneUp; and a pilot with Cruise to test grocery delivery through self-driven all-electric cars.
Walmart had also unveiled an alliance with Door Dash in the third quarter of fiscal 2021 to deliver prescriptions from pharmacies of Sam’s Club, alongside expanding Scan & Go to all fuel stations at U.S. Sam’s Clubs. In earlier developments, Walmart joined hands with Point Pickup, Roadie and Postmates, alongside acquiring Parcel, to enhance its delivery service. Furthermore, the company’s store and curbside pickup options add to customers’ convenience. As of the fourth quarter of fiscal 2021, Walmart U.S. had 3,750 pickup locations and 3,000 same-day delivery locations.
These strong moves have been helping the company stay firm amid the rising competition from Amazon AMZN. Robust delivery services also fueled the company’s e-commerce sales that surged 69% in the U.S. division in the fourth quarter, with strength across all channels and solid holiday sales at Walmart.com. Notably, the marketplace and pickup & delivery sales jumped at a triple-digit rate. At Sam’s Club, e-commerce sales jumped 42% on the back of a robust direct-to-home show and solid curbside performance.
The Zacks Rank #5 (Strong Sell) company has been seeing high COVID-19 costs, which along with the repayment of the property tax relief in the U.K. weighed on its adjusted operating income in the fourth quarter of fiscal 2021. Apart from this, management’s guidance for fiscal 2022 suggests a decline in net sales, operating income and earnings per share, mainly due to divestitures. Incidentally, the company completed the divestiture of Walmart Argentina in November 2020 and Walmart U.K. in February 2021. Further, management expects the sale of its business in Japan to be concluded in the first quarter of fiscal 2022. These divestitures, however, highlight the company’s strategy of increasing focus on areas with higher growth potential.
Shares of Walmart have lost 12% in the past three months compared with the industry’s decline of 11.7%.
2 Solid Retail Stocks
Dollar Tree DLTR, with a Zacks Rank #2 (Buy), has a long-term earnings growth rate of 10.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Target TGT, with a Zacks Rank #2, has a long-term earnings growth rate of 10.2%.
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