“The acquisitions have received a lot of attention, but our plan in e-commerce is not to buy our way to success,” Doug McMillon, Walmart’s chief executive, said in remarks to investors.
To be sure, online shopping still comprises a tiny slice of Walmart’s business, and it remains to be seen whether this strong growth is sustainable. But it is an encouraging sign for a company that has spent billions of dollars to trying to step up its game in this arena.
Marc Lore, the head of the retailer’s online business, said that a key driver of the growth was its move to offer free two-day shipping on millions of items without a membership fee. That model was meant to offer Amazon Prime-like speed without having to pay a membership fee. Walmart said it also helped that it has expanded its assortment online to 50 million items, a fivefold increase from this time last year. (Jeffrey P. Bezos, the chief executive of Amazon, owns The Washington Post.)
Meanwhile, Walmart’s broader U.S. business looked healthy in the quarter. The company reported an increase of 1.4 percent in comparable sales, a measure of its sales online and at stores open more than a year. That marked its 11th consecutive quarter of growth on this measure.
That consistent run of growth stands in contrast to what has been seen lately in the wider retail industry. Target recently reported its fourth straight quarter of declining comparable sales. Department stores such as Macy’s, J.C. Penney and Kohl’s saw their sales slide in the latest quarter. Things are looking grim at several specialty apparel retailers: Ralph Lauren said Thursday that it recorded a 16 percent drop in quarterly sales. Ascena Retail Group, the parent company of Ann Taylor, Loft and other clothing chains, saw its stock nose-dive 38 percent on Thursday after it lowered its forecasts for the year, citing “unprecedented secular change” in its category of retailing.
“Given the current retail landscape, with many retailers experiencing challenges across multiple categories, we believe Walmart will continue to turn up the competitive heat by utilizing its scale and technological advantages to extract increased market share,” Charlie O’Shea, a retail analyst at Moody’s, said in a research note.
Investors sent Walmart’s stock up about 2 percent in morning trading. The company’s revenue rose to $117.5 billion, or $118.8 billion, if you adjust for currency fluctuations. Earnings per share were $1.