(Reuters) – Wal-Mart Stores Inc (WMT.N) on Tuesday unveiled a $20 billion share buyback plan and forecast U.S. online sales to increase by about 40 percent in the fiscal year ending January 2019.
Wal-Mart’s shares were up 1.6 percent at $81.80 in premarket trading after the company also forecast overall net sales to increase by at least 3 percent in the same period.
The company, locked in a battle for market share with ecommerce giant Amazon.com Inc (AMZN.O), has been doubling down on its online business and is leveraging its 4,700 plus stores to create a more hassle-free experience for its online shoppers.
Wal-Mart reported a 60 percent jump in online sales in the United States in its latest quarter ended July.
“It is clear that Wal-Mart intends to continue to turn up the heat online, with 40 percent annual growth an impressive goal, especially on the heels of the 30 percent outlined at the 2016 investor meeting, which at the time seemed aspirational in our view,” Moody’s Lead Retail Analyst Charlie O‘Shea said.
The largest U.S. grocery retailer also said it expects to add 1,000 locations for shipping online grocery orders in fiscal year 2019. It currently ships online orders from more than 900 U.S. locations.
Competition in the grocery space has increased since Amazon bought Whole Foods and cut prices at the upmarket grocer in August.
The company forecast profit for fiscal year 2019 to increase about 5 percent over the expected adjusted earnings of $4.30 to $4.40 per share for the year ending January 2018.
The new two-year repurchase plan replaces a $20 billion buyback approved in October 2015.
Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Saumyadeb Chakrabarty