To The Moon

$Wal-Mart(WMT)$ $DJIA(.DJI)$ 

Walmart Inc. offers shopping opportunities in both retail stores and through e-commerce. The Company offers an assortment of merchandise and services at everyday low prices. The Company operates through three segments: Walmart U.S., Walmart International and Sam's Club. The Walmart U.S. segment is a merchandiser of consumer products. The Walmart International segment includes various formats divided into two categories: retail and wholesale. These categories consist of various formats, including supercenters, supermarkets, hypermarkets, warehouse clubs and cash & carry, as well as e-commerce through walmart.com.mx, walmart.ca, flipkart.com and other sites. The Sam's Club segment is a membership-only warehouse club.

Investment Overview

Online sales and technology development to improve shopping experience. Walmart continues to focus on online sales expansion with its well-established delivery service network covering 70% households in the US, with drone delivery covering seven states, while the company is also expanding its GoLocal services via the cooperations with renowned platforms such as Home Depot and Cognery. Walmart's increasing efforts on emerging technologies, such as cryptocurrency and augmented reality, may also help to improve customers’ future shopping experience and support revenue in the longer run.

Walmart’s own ecosystem to be a key differentiator. To cope with market competition as well as changing customer behaviour, Walmart has expanded its businesses from grocery retailing and general merchandises to tap into healthcare and financial services for its customers, allowing it to create stronger bonding and diversify its revenue and profit sources.

Margin recovery despite near-term pressure. While Walmart's revenue and earnings growth have remained stable over the past five years, it has seen near-term pressure from the market competition and the changing customer behaviour. Walmart's pricing strategies could potentially attract more wealthier shoppers and expand its customer base. With the ongoing improvement in supply-chain and staff management, Walmart should also be able achieve better operating efficiency and margin growth over the medium-term.

Rising competition; prolonged geopolitical uncertainties and inflation; slowdown in e-commerce growth; significant increase in capex to support e-commerce and technological advancement; etc.

Market concern over earnings growth should be largely priced in after the result miss, while Walmart should remain focus on its price leadership as well as diversification of its customer base.

@TigerStars 

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