Walmart Inc. (WMT) shares are headed to their first open over the $100 mark since last November.
Walmart surged about 4% before management's 8 a.m. ET conference call Tuesday after reporting fourth-quarter earnings of $1.41 per share, beating estimates, and group revenue of $138.79 billion, which came just over FactSet consensus.
Notably, U.S. same-store sales grew by 4.2%, well ahead the 3% guidance issued in September, and extended a streak of 17 consecutive quarters of increasing domestic sales growth.
Walmart also announced it will be increasing its dividend to an annualized rate of $2.12 per share from the current $2.08.
"Dividends remain a key part of our capital allocation after we invest in the business to sustain long-term success," Brett Biggs, executive vice president and chief financial officer at Walmart, said. "We are pleased to be increasing our annual dividend for the 46th consecutive year, which reflects the confidence we have in our future growth and strong balance sheet."
The Bentonville, Arkansas-based company noted that it returned $13.5 billion to shareholders in dividends and share repurchases, something it looks to build on.
"We had a good year, and I want to thank our associates for their great work and openness to change," CEO Doug McMillon said in summing up the year. "They continue to inspire us as we strive to serve our customers better every day. Progress on initiatives to accelerate growth, along with a favorable economic environment, helped us deliver strong comp sales and gain market share."
Expanding E-CommerceOne key change for Walmart is its shift from a brick-and-mortar bully to a more complete omnichannel business that incorporates the e-commerce angle with which Amazon.com Inc. (AMZN) has threatened it.
That segment looked strong in Tuesday morning's release, boosting market optimism.
Sam's Club e-commerce sales grew 21% in the fourth quarter, and overall Walmart e-commerce sales increased 40% for the year.
The press release said Walmart's U.S. e-commerce business is a big beneficiary of consumer trends in grocery pickup and delivery; its large selection offered to customers also helps.
"We're excited about the work we're doing to reach customers in a more digitally connected way," McMillon said. "Our commitment to the customer is clear -- we'll be there when, where and how they want to shop and deliver new, convenient experiences that are uniquely Walmart."
The company is expecting 35% growth in fiscal 2020 in U.S. e-commerce sales.
To be sure, building the e-commerce business does not come without growing pains, as Walmart expects to spend $11 billion largely on supply chain, technology and e-commerce initiatives.
Outside of the U.S., Walmart must contend with macro pressures that come from the U.S.-China trade war, nailing down its partnership with JD.com (JD) , and dealing with a possibly more adversarial India that could curb its $16 billion Flipkart centerpiece.
Questions on how the company is set to meet these challenges likely will be raised in the company's earnings call.
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