By Paul Page 

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Wal-Mart Stores Inc.'s bid to win new sales on two fronts is proving expensive. The retailer's sales rose at a strong pace both at stores and online in the latest quarter, the WSJ's Sarah Nassauer and Austen Hufford write, the latest upbeat report in what's shaping up as a strong summer for storefronts. Same-store sales rose 1.8% while e-commerce business soared 60%. But expenses rose and margins narrowed, a result becoming more familiar to brick-and-mortar stores as they try to use their real estate more efficiently while following consumers into the digital world. To pay for the efforts, the company has used automation to replace some jobs and pressed suppliers to cut their prices, increased the fees they pay to pass inventory through warehouses and narrowed the shipping window suppliers must hit to avoid fines. With overall inventory flat and inventory at stores open for a year down 3.8% while sales expanded, it looks like that effort is paying off.

Alibaba Group Holding Ltd. is using its big earnings from online sales in China to invest in a future beyond its core e-commerce market. The Chinese e-commerce leader will extend its geographic reach in the business-to-consumer world by taking part in a $1.1 billion investment in PT Tokopedia, an Indonesian marketplace, the WSJ's Liza Lin reports, flexing its financial muscle after another quarter by strongly expanding sales and profits. Alibaba nearly doubled its net income from a year ago to $2.17 billion and boosted core e-commerce sales by 58% to $6.3 billion. That business built on demand from Chinese consumers increasingly is providing the backing for even more growth. Alibaba's operating margin widened by seven percentage points, which management attributed in part to better use of data. That's sending costs as a share of sales down and, perhaps just as important, helping the company fine-tune the way it uses data to manage sales and logistics as it expands.

The longtime downturn in oil prices is taking a deeper toll on energy-related businesses. Seadrill Ltd., one of the world's biggest offshore drilling companies, is warning creditors of major losses as part of its $10 billion debt-restructuring plan, the WSJ's Costas Paris reports, including a financial hit the company says will likely spread to shipyards. The trouble at the company controlled by Norwegian shipping magnate John Fredriksen is part of the broader turmoil hitting drillers and suppliers as crude prices hovering around $50 a barrel undercut oil's economics. That's left operators from offshore drillers to tanker owners coping with overcapacity. Shipping analysts Alphatanker say tanker shipping rates have been hard hit, with "the distinct potential that they could plumb depths not seen this decade." The offshore sector has lost billions of dollars, and Seadrill's survival efforts signal the waves of red ink will hit companies serving the industry even harder.

INFRASTRUCTURE

The Trump administration plan to bring business more directly into planning for infrastructure investment is getting sideswiped by the controversy over the president's remarks on race. The White House is pulling the plug on the planned infrastructure council that was to advise President Donald Trump, the WSJ's Ted Mann reports, acknowledging the proposed members would come under pressure not to participate after chief executives from two other business groups disbanded. There will be little immediate impact since members of the infrastructure council hadn't even been appointed beyond the initial word in January that it would be led by two real estate developers close to Mr. Trump. But the action throws a new wrench into an infrastructure effort that so far has been measured in broadly-stated ambitions rather than detailed plans. The president signed an order this week telling agencies to speed up reviews of projects, but there's been little movement in Congress on big questions that would come with new spending.

QUOTABLE

IN OTHER NEWS

U.S. factory output slipped 0.1% in July, the second decline in three months. (WSJ)

U. S. and South Korean negotiators will meet next week in Seoul to potentially amend a five-year-old trade agreement. (WSJ)

Japanese exports rose 13.4% in July from a year ago, helped by automotive business. (WSJ)

U.S. housing starts declined for the fourth time in five months in July, decreasing 4.8%. (WSJ)

The Wisconsin state assembly approved a controversial $3 billion tax incentive package for Foxconn Technology Group. (WSJ)

Sears Canada Inc.'s top executive is preparing an offer to save the bankrupt retailer from liquidation. (WSJ)

Bankrupt shipping-fleet operator Toisa Ltd. asked a judge to approve voting on a debt-restructuring plan that purports to repay all creditors in full. (WSJ)

Union Pacific Railroad Inc. will lay off 750 workers, including about 8% of its management force. (Reuters)

U.S. road and rail shipments declined 3.2% from June to July, according to the Cass Freight Index. (Logistics Management)

A U.S. manufacturers' group asked the White House to rein back approval of natural gas exports. (Bloomberg)

CMA CGM SA will offer U.S. exporters shipping pacts through the New York Shipping Exchange with guaranteed rates and transit times. (American Shipper)

German investment house Ernst Russ is trying to seize control of Marenave as the ship owner goes through liquidation. (Lloyd's List)

Iron ore shipments on the Great Lakes rose 68% from a year ago in the reporting period ending July 31. (Northwest Indiana Times)

Roadrunner Transportation Systems Inc. is selling its Unitrans subsidiary to Quick International Courier as it sheds operations outside its core trucking. (Business Journals)

Pre-tax profit at Nippon Express jumped 24% to $145 million in the Japanese freight forwarder's fiscal first quarter. (The Loadstar)

Singapore's exports of electronic products soared 16.8% in July. (Straits Times)

FedEx Corp. named 35-year company veteran Mark Allen as its general counsel. (Post & Parcel)

The Port of Los Angeles is reviewing security after a suspected car thief drove onto a container terminal and climbed a large gantry crane. (Los Angeles Times)

ABOUT US

Paul Page is deputy editor of WSJ Logistics Report. Follow him at @PaulPage, and follow the entire WSJ Logistics Report team: @brianjbaskin , @jensmithWSJ and @EEPhillips_WSJ. Follow the WSJ Logistics Report on Twitter at @WSJLogistics.

Write to Paul Page at paul.page@wsj.com

 

(END) Dow Jones Newswires

August 18, 2017 06:45 ET (10:45 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.
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