Walmart's e-commerce strength on full display in Q1
Walmart’s first-quarter earnings highlighted its e-commerce and omnichannel growth, particularly as consumers looked to navigate the COVID-19 pandemic. The Bentonville, Ark.-based retailer posted sales of $134.6 billion, up $10.7 billion from the prior-year period, with comparable-store sales up 10% as a result of strong food, consumables, health-and-wellness and general merchandise categories.
E-commerce was particularly strong for Walmart in the first quarter of its fiscal 2021, with e-commerce sales growing 74% over the prior-year’s first quarter, driven largely by grocery pickup and delivery, as well as Walmart.com and the company’s online marketplace for third-party sellers.
On the topic of e-commerce, Walmart CEO Doug McMillon noted that Jet.com, which the company acquired in 2016 for $3.3 billion was “critical to jump-starting the progress we have made the last few years,” but that the time had come to shut down Jet.com’s stand-alone site, in part because of the strength of Walmart’s brand recognition.
“While the [Jet] brand name may still be used in the future, our resources, people and financials have been dominated by the Walmart brand because it has so much traction,” he said on a call with analysts. “We’re seeing the Walmart brand resonate regardless of income, geography or age.”
Part of what differentiated Jet was its private brand program, particularly its Uniquely J brand, which spanned consumables, baby, paper and cleaning products and which is now sold on Walmart’s e-commerce site. Marc Lore, who founded Jet, currently leads Walmart’s U.S. e-commerce division.
As for Walmart’s e-commerce strategy going forward, Lore suggested that name-brand products would be playing a particularly important role as it looks to drive the online mix into such higher-margin categories as home and fashion. “That means that we need to continue to add brands,” Lore said, noting that Ray-Ban and Champion were among the brands now operating in the company’s marketplace.
For the quarter, earnings per share were $1.40. The company has withdrawn its financial guidance for the full fiscal year, noting “unprecedented variability in the macro environment brought on by COVID-19.
Walmart CFO Brett Biggs noted, “Our business fundamentals are strong, and our financial position is excellent. Customers trust us to deliver on our brand promise, and I’m confident in our ability to perform well in most any environment. While the short-term environment will be challenging, we’re positioned well for long-term success in an increasingly omni world.”