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Wal-Mart Stores to Walmart: What’s Behind the Name Change?


In a bid to emerge as an omni-channel retailer officially, Wal-Mart Stores, Inc. WMT is set to rechristen itself. The big-box retailer is doing away with the “hyphen” and “stores” from its name and will be known as “Walmart Inc." effective Feb 1, 2018. The latest move is a significant step for the company, which has been leaving no stone unturned to integrate physical and digital operations and counter rising competition from e-commerce giant Amazon AMZN.

How will the Rechristening Benefit?

Management stated that the company’s current name is used only in few legal places as it is more popular as just “Walmart”, given its seamless operations across stores, online as well as its app. Thus, this name change will bring uniformity and reveal Walmart’s unified and omni-channel existence universally.

In an Amazon-dominated world, the latest move underscores Walmart’s focus on moving beyond brick-and-mortar to resonate with customers’ evolving shopping patterns. Another move in this respect was highlighted earlier this week when sources revealed that Walmart’s Brazilian unit is planning to integrate its physical and digital operations, alongside expanding its online activities. In fact, this supermarket giant has long been undertaking aggressive efforts to enrich customers’ experiences, by facilitating shopping through miscellaneous channels.

This is well-evident from its growing online sales, driven by constant e-commerce initiatives — including buyouts, alliances, and improved delivery and payment systems. Evidently, Walmart’s buyouts of Bonobos, ShoeBuy, Moosejaw, ModCloth and Jet.com underscore its quest to build an impressive digital brand portfolio. The company’s Walmart Pay mobile payment system, and Mobile Express Returns program further highlight its focus on accelerating online business and making shopping easier and faster.

Apart from this, Walmart is taking initiatives to expand in the booming online grocery space, which was a major contributor to e-commerce sales in the third quarter. In fact, Walmart’s efforts to enhance delivery services resonates quite well with its strategy of growing online grocery sales. In this regard, Walmart recently acquired a delivery start-up Parcel, Inc., which specializes in same-day delivery. Other than this, the company’s Walmart Pickup program enables customers to place orders online and then pick them up at a store for free. In earlier developments, Walmart partnered with ride hailing services Uber and Lyft for speedy online grocery deliveries.

Backed by the aforementioned endeavors, Walmart’s U.S. e-commerce sales soared 50% in the third quarter of fiscal 2018, primarily owing to Walmart.com, which launched about 17 years back. Moreover, the reflection of Walmart’s impressive efforts is clearly visible in the company’s stellar earnings and comparable store sales record. This, in turn has helped this Zacks Rank #2 (Buy) stock rally 43.6% this year, surpassing the industry’s growth of 34.5%.

Management plans to continue making investments in solidifying its worldwide store base and strengthening its e-commerce capacities to enhance consumers’ convenience. We believe that these strategies are likely to bolster Walmart’s performance and drive the stock further.

Looking for More Retail Stocks? Check These Trending Stocks

Dollar General Corporation DG carrying a Zacks Rank #2 has an impressive long-term earnings growth rate of 11.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Ross Stores, Inc. ROST delivered an average positive earnings surprise of 5.5% in the trailing four quarters and has a long-term earnings growth rate of 10%. The company carries the same Zacks Rank as Dollar General.

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