Walmart pours $2 billion tax windfall into
e-commerce, pay raises Walmart, the world�s largest retailer, expects
an extra $2 billion this year from a GOP-led tax overhaul, money that it will invest in
pay raises for employees and upgrades to an online business whose growth slipped at the
end of last year. Not only will the Bentonville, Ark.-based
company�s effective tax rate be 26 percent or lower, compared with a previous projection
of 32.5 percent, it will also get a boost from changes to rules governing depreciation
of buildings and equipment, Chief Financial Officer Brett Biggs said Tuesday. �We�ll focus first on investing in our
business and other growth initiatives,� Biggs said, noting that the company increased
starting pay for its hourly store workers to $11 this month, the first of a budget year
that stretches through Jan. 31, and agreed to give them a one-time bonus of $1,000. �In addition to that, we�ll look to accelerate
investments in our customers through lower prices, and we�ll make investments in technology,
supply chain and e-commerce to better position the company for the future,� Biggs said. By boosting worker pay, Walmart joins companies
from lender JPMorgan Chase to drugmaker Pfizer and pharmacy chain CVS that have used portions
of the benefits from the tax law signed by President Trump to reward employees. The legislation, passed in December, cuts
the top corporate rate to 21 percent from 35 percent and eliminates levies on overseas
assets brought to the U.S. after a one-time payment. Walmart�s internet sales growth in the U.S.
slowed to 23 percent in November through January, compared with 50 percent in the previous quarter,
executives said. While most of that reflected the timing of
revenue gains a year earlier from the Jet.com acquisition, part of the slowdown �was unexpected,
as we experienced some operational challenges that negatively impacted growth,� CEO Doug
McMillon said. A spike in inventory for the holiday season,
such as toys and gifts, crowded out stock in everyday purchases, he said, �so we�re
learning how to deal with higher volumes and learning how to deal with a higher peak than
we had previously.� Walmart posted growth of about 40 percent
in e-commerce for the year and is targeting the same amount this year. �It�s really all about providing more
convenience for customers � customers that shop across all channels are important to
us,� McMillon said. �U.S. customers that shop us in-store and
online spend nearly twice as much as customers that only shop with us in stores.� Walmart�s full-year revenue rose 3 percent,
the company said, topping $500 billion for the first time. Still, net income dropped 28 percent to $9.86
billion, or $3.28 a share, and the company predicted profit this year of $4.75 to $5
a share, lower than the $5.03 average estimate from analysts surveyed by FactSet. The retailer�s shares fell 9.3 percent to
$95.06 in New York trading on Tuesday, widening the decline so far this year to 3.7 percent.