Walmart e-commerce sales soar 43%
Walmart on Thursday reported that third quarter total revenue rose $1.7 billion or 1.4% to $124.9 billion (or, currency neutral, rose $2.9 billion or 2.4% to $126.1 billion).
In the U.S. in the quarter, sales rose 3.7% and store comps rose 3.4%, "with broad-based strength and market share gains in key categories," the company said in a press release, citing Nielsen and The NPD Group. Sam's Club comp sales rose 3.2%, with improving membership trends, and e-commerce sales grew 32%, the company also said.
Overall operating income rose 4.7% to $5 billion (or 5.9% in constant currency), and U.S. operating income rose 2.9% to $3.9 billion, according to the release.
Walmart is making its move on Amazon, demonstrating in the quarter that its brick-and-mortar advantage and the innovation and investments led by U.S. e-commerce chief Marc Lore are all paying off.
"Q3's impressive performance continues to validate Walmart's long-term investment strategy, with solid revenue and operating margin growth, as well as online sales growth of 43% continuing to exceed the company's stated goal for 2018," Moody's Investors Service Lead Retail Analyst Charlie O'Shea said in comments emailed to Retail Dive.
Over the past 12 months, Walmart has grown its market share in every major online category, with rising levels of satisfaction with its online offering and among younger shoppers, according to data from GlobalData Retail emailed to Retail Dive. What appears to be surprising analysts is that the retail giant is accomplishing it with steady profits. Its grocery concessions are helping there, according to Bob Phibbs, CEO of retail consultancy Retail Doctor.
"The path to the consumer in a lot of ways is through the grocery store," Phibbs told Retail Dive in an interview. "They're probably making a bigger bet on data than most people realize. They're hitting that sweet spot more often, and more with a laser than with a scattershot approach."
Neil Saunders, managing director of GlobalData Retail, also noted that, along with its e-commerce push, the company isn't neglecting its stores. "[T]he refurbishment of many shops have been well received and have helped to drive up visitation, conversion and spend," Saunders noted in comments emailed to Retail Dive. "While Walmart's refresh isn't as radical as Target's, the remodels are making Walmart a brighter and more enjoyable place to shop — and in which to collect online orders. We also believe that they are helping to elevate and boost categories where Walmart has sometimes struggled for growth, like apparel."
The retailer hasn't vanquished Amazon, though, and could do more to make itself the first "port of call" for shoppers, Saunders warned. For now, Walmart is well positioned for the holidays, he said, noting that its strong convenience play will draw shoppers, as will its "enhanced ranges" in toys and clothing.
Follow Daphne Howland on Twitter