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Oct 10 (Reuters) - Wal-Mart Stores Inc on Tuesday forecast that U.S. online sales would soar about 40 percent in the fiscal year ending January 2019, sending its stock up nearly 4 percent to the highest in more than two years.
The retailing behemoth also said it will buy back $20 billion of its shares over the next two years.
The outlook came hours before the company's annual investor meeting in Bentonville, Arkansas. The company also forecast overall net sales to rise by at least 3 percent in the same period
Wal-Mart, locked in a battle for market share with ecommerce group Amazon.com Inc, has been doubling down on its online business and leveraging its 4,700-plus stores trying to create a more hassle-free experience for online shoppers.
With a steady rise in people buying online, Wal-Mart's e-commerce sales growth has been outstripping brick-and-mortar.
"It is clear that Wal-Mart intends to continue to turn the heat online, with 40 percent annual growth an impressive goal, especially on the heels of the 30 percent outlined at the 2016 investor meeting, which at the time seemed aspirational in our view," said Charlie O'Shea, Moody's lead retail analyst.
In August, the company said online sales in the United States had increased 60 percent in the latest quarter, but warned that current-quarter profit could miss Wall Street estimates as margins are being hurt by price-cutting and heavy spending on e-commerce.
Total revenue increased 2.1 percent to $123.4 billion in the latest quarter. Wal-Mart did not break out online sales.
Like other retailers, Wal-Mart has been investing aggressively. The company said on Tuesday it expects capital expenditures to be about $11 billion for fiscal years 2018 and 2019.
It started offering free two-day shipping and discounts for picking up online purchases at stores, and has acquired several start-ups, including Jet.com for $3.3 billion last year.
Wal-Mart, the largest U.S. grocery retailer also said on Tuesday it expects to add 1,000 locations for shipping online grocery orders in fiscal year 2019. It currently ships online orders from more than 1000 U.S. locations.
Grocery competition has increased since Amazon bought Whole Foods and started to cut prices at the upmarket grocer in August.
Wal-Mart forecast fiscal 2019 profit would increase about 5 percent over the expected adjusted earnings of $4.30 to $4.40 per share for the year ending January 2018.
The new buyback replaces the existing $20 billion program announced in October 2015. In the seven quarters since, Wal-Mart had bought back $15.10 billion worth of shares.
It was not immediately clear how much of the remaining $4.9 billion under the old plan it had used in the current quarter.
Wal-Mart stock was up $3.15 at $83.65, the highest since March 2015. (Reporting by Sruthi Ramakrishnan in Bengaluru and Dan Burns and Sayantani Ghosh in New York; Editing by Saumyadeb Chakrabarty and Jeffrey Benkoe)