Wal-Mart Stores Inc highlighted strong gains in its e-commerce business that boosted US sales, winning plaudits from Wall Street on Thursday after other retailers released disappointing earnings.
The world’s biggest retailer is accelerating efforts to “combine our digital and physical assets to make our shipping simple and easy for customers,” CEO Doug McMillon said in a statement. “Our customers have choices, and we have to earn their business with every interaction.”
Wal-Mart has been pumping funds into improving its in-store experience, upgrading stores and boosting worker pay, at the same time that it has been building out its e-commerce business.
The costs of those initiatives have pressured earnings in recent quarters, and the company reported earnings of US$3 billion in the first quarter of fiscal 2018, down 1.3 percent from the same period last year. Revenue was up 1.4 percent at US$117.5 billion.
However, the initiative has produced gains in comparable store sales in the US, a closely watched benchmark that rose 1.4 percent in the first quarter.
E-commerce sales surged 63 percent and merchandise volume saw a 69 percent jump.
Analysts at Global Data Retail said Wal-Mart’s sharp focus on keeping prices down in grocery was winning some customers back and described growth in e-commerce as evidence of a business “in the ascendancy.”
“Overall, this is an encouraging start to the year for Walmart,” GlobalData Retail said in a research note. “This is one US retailer that is ahead of the curve in responding to the evolving landscape.”
Wal-Mart shares gained US$2.42, or 3.2 percent, to close at US$77.54 on Thursday.
Wal-Mart has boosted its online offerings to 50 million items, up five-fold from a year ago, Walmart eCommerce US president and CEO Marc Lore said.
“There’s more product to buy, you’re able to get the product quicker,” Lore said in a conference call with reporters. “The overall experience is improving.”
The gains followed a number of Wal-Mart acquisitions over the past year, although executives described the majority of the growth as “organic.”
Wal-Mart’s financial reports do not provide a breakdown of revenue for e-commerce sales.
Chief financial officer Brett Biggs said e-commerce is “still fairly small” within Wal-Mart’s US business and there was no immediate plan to disclose more details about the business.
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