Marc Lore, Walmart’s CEO of U.S. Ecommerce, pushed back on critics at ShopTalk by saying the company’s Q4 ecommerce sales falloff was planned, that Walmart doesn’t give quarterly online sales guidance and that the company was taking the opportunity to “create a healthier business.”
Lore made no mention of the “operational challenges” that were cited by Walmart CEO Doug McMillon in a February earnings call.
“That Q4 was largely planned,” Lore told Jason Del Rey of Recode. “We told the street what we’d do in the quarter, and that was exactly what we did. We never give quarterly guidance and we didn’t this time. We felt that reiterating 40% growth in the next year was enough, it obviously wasn’t. We have 40% growth planned this year.” Lore also said Walmart’s effort to rein in resellers was also a factor in the quarter.
In Q4, Walmart’s ecommerce sales growth, which had been averaging north of 50% in prior periods, dropped by more than half to 23%. McMillon said the operational challenges included inventory overstock during the critical holiday period. The company’s ecommerce sales growth rate for the entire year was 40%.
A former director of business development for Walmart claimed last week in a lawsuit that the company skirted rules and published misleading results that helped inflate its ecommerce numbers, charges that Walmart denies. The former executive, Tri Huynh, said he was fired after voicing concerns to management, including Lore; the company said it was part of a broader headcount reduction.
Lore said Walmart is adding 1,000 new pickup locations for online orders in 2018 to the 1,200 existing ones, and that 40% of its U.S. stores will have same-day delivery.
Reports have been circulating that Lore would be out of his post at Walmart in the wake of the Q4 results, and the whistleblower lawsuit. When asked whether he would be in his position a year from now, Lore answered, “I absolutely will,” adding he is committed to the company for five years.
Lore came on board in his current role in August 2016 when his company Jet.com was acquired by Walmart for $3.3 billion, by far its largest to date. Walmart has been in hot pursuit of main ecommerce rival Amazon ever since.
Lore also addressed whether Jet would be going away after reports that Walmart decreased its market spend, saying it wasn’t and that more acquisitions are in the pipeline.
“We’re looking and talking to more companies than we ever have, we are definitely in the acquisition mode,” said Lore.
Andy Dunn, founder of Bonobos and Senior Vice President of Digital Brands for Walmart, said consumers should expect that all of Walmart’s acquired ecommerce brands (Bonobos, Modcloth, Allswell, Moosejaw, etc.) will end up on Jet.com. Lore added Walmart is repositioning Jet to have more curated products that appeal to urban millennials.