The Atlanta Journal-Constitution
Walmart’s online, food sales boost results, raise outlook
NEW YORK — Surging online sales and strong food sales helped Walmart deliver its largest sales gain for established U.S. stores in more than eight years.
The company also raised its annual profit outlook Thursday after delivering third-quarter results that beat expectations.
The report shows that Walmart’s aggressive discounting and its moves to spiff up stores and increase online services are working to attract shoppers. It also underscores the efforts the discounter is making to narrow the gap between itself and Amazon.
Amazon, the online leader, has been building its network of services on its own, using its $99-a-year Prime membership with same-day and even onehour shipping options to develop loyalty. And Amazon’s purchase of Whole Foods Market this year has raised the competitive stakes in the food business.
But Walmart’s efforts to stave off competition from the online behemoth are working. In fact, Walmart says its food business, critical to drawing shoppers into its stores, had the strongest quarterly performance in nearly six years.
“Curiosity, creativity, decisiveness and speed are priorities,” Doug McMillon, CEO of Wal-Mart Stores Inc., said in a prerecorded statement.
Since buying Jet.com for more than $3 billion last year, Walmart has been on an acquisition spree, added new online services and expanded its online offerings. Walmart has bought such online retailers as Bonobos and ModCloth and is looking for other niche players. It also has more than tripled the number of online items to more than 70 million.
The discount chain announced a web partnership Monday with Lord & Taylor. Walmart aims to build a premium fashion website, starting with the high-end department store chain. Lord & Taylor hopes it will attract new customers already buying higher-end products on walmart.com.
Walmart posted quarterly revenue of $123.18 billion, surpassing Wall Street forecasts of $121.05 billion.
Sales at stores opened at least a year rose 2.7 percent for Walmart’s U.S. division, beating estimates of 1.8 percent. That marked the biggest gain since the first quarter of 2009. It’s the 13th straight quarter of increases in that metric.
E-commerce sales grew 50 percent, though Walmart has a long way to go to get even close to Amazon’s dominance online. Walmart’s e-commerce business accounts for about 2 to 3 percent of its annual sales, or about $14 billion. That compares with Amazon’s $94.66 billion in the last calendar year.
The company has been aggressively cutting prices and has overhauled its shipping strategy and is planning to double the number of store-curb pickup for groceries ordered online to 2,000 by next year. And it has aligned with Google on voice shopping.