NPD's Big Back-To-School Prediction Regarding Amazon Versus Walmart

Overnight, NPD came out with a report that predicted Walmart would double its online sales growth as compared to Amazon for this upcoming back-to-school shopping season. Their prediction is based on Walmart's acquisition last year.

Think about that for a minute.

The Street expects Walmart to report revenues of $495 billion for 2017 (year-on-year growth rate of 2%) while Street expectations for Amazon revenues are in 2017 are $166 billion (expected growth rate 22% year-on-year).

Walmart overpaid for last year, and it cost shareholders a cool $3 billion as Walmart tried to compete with Amazon. NPD estimates that as a result of the acquisition, Walmart has added 400,000 online customers plus gained e-commerce knowledge.

NPD is expecting Walmart to grow its online sales by 2 to 5%. Wall Street expects Amazon to grow its revenues by 22% in 2017.

Maybe, NPD forgot that Amazon sales are all online.

NPD goes on to say that Walmart has increased its product offerings from 8 million items to 20 million by end of 2016, while Amazon has more than 300 million items available for sale online. According to their findings, online sales for Walmart grew by 63% in Q1:17 and now accounts for about 3% (seriously?) of total revenues or roughly $15 billion.

From an estimated base of $15 billion per year, Walmart should see 20% to 30% growth, which is impressive, but just does not hold a candle to Amazon's 22% growth rate (almost all online) off a base of $166 billion.

In other words, Amazons estimated $40 billion in revenue growth going forward will be almost double Walmart's online revenues even of they manage to grow their own online sales at between 20-30% estimated by NPD.

Walmart is also offering two day free shipping on eligible orders which is similar to the offering Amazon has for Prime members.

Just establishing a factual analysis off the NPD report.

Yes, we are in that period of tech apathy so severe that everyone and their dog is predicting the demise of mega-cap tech land yet again as they have since time began.

(Long amzn, long and short amzn options)

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