Walmart’s massive investments in digital bore fruit during its fiscal first quarter.
E-commerce sales for the company’s U.S. division rose 33 percent for the three months, ended April 27, aided by its expanding online grocery pickup business.
In prepared commentary, president/CEO Doug McMillon noted that the e-commerce food operation is having a synergistic effect on sales by growing the number of omnichannel customers — who spend nearly twice as much online as other shoppers and spend more in stores as well.
Walmart could use the brick-and-mortar assist: comp sales at U.S. flagship stores edged up a slim 2.1 percent excluding fuel; average comp ticket increased 1.3 percent; and comp traffic rose less than 1 percent. All were “somewhat negatively impacted” by April’s unseasonably cool weather, McMillon said, although wireless enjoyed “solid comp sales growth,” the company reported.
Net sales at Walmart U.S., including e-commerce, was up 3.1 percent, to $77.7 billion.
At sister chain Sam’s Club, e-commerce sales increased 25 percent, comp sales at stores rose 3.8 percent, but net sales slipped 2.7 percent, to $13.6 billion, attributable to the closure of 63 locations and the decision to ban tobacco sales at select stores.
Strong performances in office and tablets offset slower sales in TVs, imaging and mobile, the company said, leaving Sam’s Club’s tech, office and entertainment category ahead by low single-digit comps.
Companywide, total revenues rose 4.4 percent to $122.7 billion and net income fell 30 percent to $2.1 billion, due, said chief financial officer Brett Biggs, to e-commerce investments, higher transportation costs, retail price cuts, the exit from its Canadian bank business, and a loss from its investment in Chinese e-commerce company JD.com.
Looking ahead, McMillon forecast a 40 percent increase in Walmart.com sales for the full year, buoyed by a new website and app; a broader assortment of premium brands; and the online availability of more than 75 million items from the discounter and its third-party sellers.
Walmart also plans to essentially double its online grocery pickup service to more than 2,100 stores this year, and is adding 500 more automated in-store pick-up towers, for retrieving online orders, for a total of 700 by December.
The company’s online sales took flight after acquiring Jet.com for $3.3 billion in 2016 and enticing its founder Marc Lore to the lead the fight against his former rival and employer Amazon.