Four years after purchasing Jet.com for more than $3 billion, Walmart Inc. has made the decision to shutter the e-commerce business.
The big-box chain quietly announced in its first-quarter report that it would be discontinuing the website it scooped up when the digitally native marketplace was just over a year old. It cited the “continued strength” of Walmart.com and noted that the acquisition was “critical” to accelerating its omnichannel strategy.
During the company’s earnings conference call, president and CEO Doug McMillon said that its flagship brand has dominated the company’s resources and resonates with a range of consumers whose incomes, geographies and ages are varied. He added that the Jet brand name could still be used in the future.
“The Jet acquisition was critical to jump-starting the progress we’ve made the last few years,” McMillon explained. “Not only have we picked up traction with pickup and delivery, but our Walmart.com non-food e-commerce growth accelerated after the arrival of Marc [Lore, Jet.com’s founder] and the Jet team. He leaned into the Walmart brand quickly.”
When Walmart acquired Jet.com in 2016, analysts had largely categorized the move as an “educational buy” that would allow the retail giant to use the site as the learning foundation to grow its own e-commerce business. The writing had already been on the wall for Jet.com for some time: In June, some of its staff had been folded into Walmart, while president Simon Belsham had stepped down amid declining sales.
As it prepares to shut down the site, the Bentonville, Ark.-based retailer announced that the “vast majority” of Jet.com associates had already previously transferred over to the Walmart brand. What’s more, Lore is now executive chief of Walmart’s e-commerce business in the United States, which logged a 74% sales gain in the three months ended May 1.
Due to its status as an essential retailer, Walmart has continued to operate throughout the coronavirus pandemic even in hard-hit areas and witnessed an influx of consumers who flocked to its locations to stock up on household supplies and other necessities. Today, it reported first-quarter profits that rose 3.9% to $3.99 billion, or $1.40 per share. On an adjusted basis, earnings per share were $1.18 — exceeding market watchers’ bets by one cent. Revenues also jumped 8.6% to $134.62 billion, versus analysts’ forecasts of $130.31 billion.