In a strategic move to enhance its supply chain and delivery efficiency, Walmart Inc. WMT has deepened its partnership with Symbotic Inc. SYM through a new agreement. Per the deal, Symbotic will buy Walmart's Advanced Systems and Robotics business, enhancing Walmart’s Accelerated Pickup and Delivery (APD) capabilities at its stores.
WMT & SYM’s Deal in Detail
The deal aims to bring Symbotic’s AI-powered robotics platform into Walmart's operations to provide faster and more convenient shopping experiences for customers. This initiative involves designing and deploying advanced systems to automate online pickup and delivery processes at hundreds of Walmart locations. The agreement includes Walmart's funding for a development program and an initial commitment to implement APD systems at 400 stores, with options to expand further in the future.
Symbotic’s acquisition of Walmart’s robotics business includes a cash payment of $200 million at closing and up to $350 million in contingent consideration tied to the volume of APD systems ordered. Walmart will pay Symbotic $520 million for the development program, including $230 million at closing, to enhance existing fulfillment systems and create new solutions tailored to future customer needs.
This collaboration could add more than $5 billion to Symbotic’s backlog and expand its addressable market. For Walmart, the partnership offers an opportunity to further optimize its e-commerce operations while driving value for customers through advanced automation.
WMT Price Performance vs. Industry
Image Source: Zacks Investment Research
Walmart Continues to Strengthen E-Commerce Arm
The acquisition goes in sync with Walmart’s commitment to leveraging technology to meet growing customer demand for seamless online shopping and efficient local fulfillment. With about 90% of the U.S. population living within 10 miles of a Walmart store, these enhancements are poised to boost Walmart’s ability to fulfill e-commerce orders directly from stores, reducing costs and increasing delivery speed. For the quarter ended Oct. 31, 2024, Walmart reported nearly 50% year-over-year surge in store-fulfilled deliveries.
From investing in pioneering data analytics to expanding its digital presence and optimizing in-store operations, Walmart leaves no stone unturned. Impressive store proximity to customers has allowed Walmart to use its stores to fulfill e-commerce orders. The Zacks Rank #2 (Buy) company has undertaken several initiatives to enhance e-commerce operations, including buyouts, alliances, and improved delivery and payment systems. In the third quarter of fiscal 2025, global e-commerce sales rose 27% on store-fulfilled pickup & delivery and marketplace.
The abovementioned acquisition, expected to close during Symbotic’s fiscal second-quarter 2025, reflects Walmart's strategy of integrating innovative technologies to maintain its leadership in the retail space while meeting evolving consumer expectations. Shares of WMT have rallied 12.3% in the past three months compared with the industry’s growth of 11.8%.
2 Other Solid Bets
Costco Wholesale COST currently carries a Zacks Rank of 2. COST delivered a trailing four-quarter earnings surprise of 2%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The consensus estimate for Costco’s current financial-year sales and earnings suggests growth of 7.2% and 11.8%, respectively, from the year-ago period’s reported figure.
The TJX Companies, Inc. TJX, an off-price retailer, currently carries a Zacks Rank #2. TJX delivered a trailing four-quarter earnings surprise of around 4%, on average.
The Zacks Consensus Estimate for The TJX Companies’ current financial-year sales and earnings indicates growth of 3.7% and 11.2%, respectively, from the year-ago reported number.
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