Wal-Mart Stores Inc (WMT.N) on Tuesday forecast that U.S. online sales would soar about 40 per cent in the fiscal year ending January 2019, sending its stock up nearly 4 per cent to the highest in more than two years.

The retailing behemoth also said it will buy back US$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 per cent in the same period

Wal-Mart, locked in a battle for market share with ecommerce group Amazon.com Inc (AMZN.O), 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 per cent annual growth an impressive goal, especially on the heels of the 30 per cent 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 per cent 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 per cent to US$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 US$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 US$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 per cent over the expected adjusted earnings of US$4.30 to US$4.40 per share for the year ending January 2018.

The new buyback replaces the existing US$20 billion program announced in October 2015. In the seven quarters since, Wal-Mart had bought back US$15.10 billion worth of shares.

It was not immediately clear how much of the remaining US$4.9 billion under the old plan it had used in the current quarter.

Wal-Mart stock was up US$3.15 at US$83.65, the highest since March 2015.