Walmart’s latest earnings prove that under the right circumstances, an ample brick-and-mortar presence can help take a growing e-commerce business to the next level.
The Arkansas-based retailer on Thursday reported that its U.S. online sales swelled 43 percent in the third quarter, beating analysts’ expectations and proving that the investments it’s made to compete against Amazon on the e-commerce giant’s turf are paying off. Walmart also rose to third place on the list of the world’s largest online retailers for 2018, according to market research firm eMarketer, overtaking Apple and coming in behind Amazon and eBay. (The Bezos-run behemoth took an even bigger share of the pie, however, with 48 percent of all e-commerce sales versus 43.1 percent in 2017.)
Walmart credited its online growth in part to the expansion of its online grocery business throughout the U.S., as well as the addition of more private-label brands and marketplace offerings, including on Jet.com, which it acquired in 2016.
The retailer has shown significant interest in developing its fashion offerings in the past year, adding plus-size brand Eloquii to its portfolio, where it joins the vintage-inspired Modcloth line, menswear label Bonobos and footwear retailer ShoeBuy.com (now Shoes.com). It also rolled out a partnership with Lord & Taylor to offer premium brands on Walmart.com.
Walmart wasn’t ahead on all fronts this quarter: Revenues came in at $124.9 billion, versus the expected $125.55 billion, due to currency impacts. But in stores, comparable sales rose 3.4 percent, beating Wall Street’s predicted growth of 3.1 percent. Adjusted earnings per share were $1.08, versus the expected $1.01, but the company’s stock was trading down by just over 1 percent as of 10 a.m. EST.
One of the headwinds Walmart could be facing in the coming months? A new bill from Sen. Bernie Sanders announced Thursday that seeks to force it to raise its minimum wage to $15 per hour (as Amazon said it will do this year), provide at least seven days of sick leave and cap CEO pay at 150 times the median employee pay. The legislation would do so by fining companies with more than 500 employees for buying back their own stock unless they met these requirements. Stock buybacks, which have surged in 2018 since the Trump administration tax cuts, boost companies’ stock prices and put more money into the hands of investors.