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Walmart Reports Earnings and Jettisons Jet.com

Walmart Reports Earnings and Jettisons Jet.com

We’ve seen how ecommerce pure-play marketplaces performed in Q1 (Amazon, eBay, and Etsy), today Walmart revealed its performance for its latest quarter (February, March, and April).

Notably, the company also announced it’s closing down Jet.com, which it had acquired in October 2016 for approximately $3 billion in cash and $300 million of Walmart shares.

Some of the more interesting highlights from its press release follow:

  • Walmart U.S. comp sales increased 10.0%, led by strength in food, consumables, health & wellness and some general merchandise categories.
  • Walmart U.S. eCommerce sales grew 74% with strong results for grocery pickup and delivery services, walmart.com and marketplace.
  • Net sales at Walmart International were $29.8 billion, an increase of 3.4%. Changes in currency rates negatively affected net sales by approximately $1.3 billion. As a reminder, with the exception of Canada, all other international markets report on a one month lag.

Closing Jet.com

Walmart explained its decision to close Jet, writing, “Due to continued strength of the Walmart.com brand, the company will discontinue Jet.com. The acquisition of Jet.com nearly four years ago was critical to accelerating our omni strategy.”

For context, the company had published the “Five Big Reasons Walmart Bought Jet.com” on the Walmart corporate website in 2016.

Last year, Walmart had written in a post titled, “Update on Our U.S. eCommerce Strategy and the Role of Jet“: “Jet continues to be a very valuable brand to us, and it is playing a specific role in helping Walmart reach urban customers.”

Category Performance

The following Walmart US quarterly merchandise highlights may be interesting to online sellers:

Grocery (saw comp growth of “low double-digit”)
Food and consumables sales were strong and grocery pickup and delivery reached all-time high sales volumes. Food strength was broad-based across categories while consumables’ sales were led by paper goods and household chemicals.

Health & Wellness (saw comp growth of “high single-digit”)
Pharmacy comp sales increased by a high single-digit percentage due to branded drug inflation and strong 90-day script growth. This was partially offset by lost sales from the temporary closures of our Vision Centers in mid-March.

General merchandise (saw comp growth of “mid single-digit”)
Sales were volatile across categories as stay-at-home mandates and government stimulus money affected results. We saw strength in electronics, media & gaming, toys, sporting goods and home. Crafts and fabric sales were particularly strong. This was partially offset by softness in apparel as well as lost sales from the temporary closures of our Auto Care Centers in mid-March.

Anne D’Innocenzio, Associated Press reporter covering retail, covered the earnings call and tweeted: “Walmart spent $900 million in costs related to COVID-19 during fiscal first quarter; it expects similar costs during the current quarter. $WMT.”

She also tweeted, “Walmart CEO Doug McMillon says shoppers, flush with stimulus money, have bought clothing, TVs and video games $WMT”

More information about the quarter is available on the Walmart.com corporate website.

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.