Walmart Q3 Ecommerce Sales Up 8%, Says Holiday Prep in Good Place

walmart fulfillment center

Walmart reported its ecommerce sales in the U.S. increased 8% in the third quarter, and have gained a total of 87% since the same period in 2019, an incredible jump since pre-pandemic days as the retail giant continues to expand digitally, while declaring itself ready for the holidays.

“We’re seeing increased contributions from growth businesses such as advertising, ecommerce marketplace and Spark last-mile delivery,” said Walmart EVP and CFO Brett Biggs on an earnings call with analysts. “Our delivery reach is expanding and our scale enables us to monetize this capability by offering same day services to other merchants through our Walmart GoLocal’s B2B initiative.”

Recently, Home Depot was announced as Walmart’s first major retail client utilizing its GoLocal same-day delivery services. Spark is Walmart’s crowdsourced, same-day delivery service powered by Bringg which launched in 2018.

In terms of holiday preparedness, Biggs said Walmart has done a good job of getting inventory into position, in a very challenging year that has many experts warning of empty shelves and urging consumers to buy and order early. Overall, inventory levels are up 11.5% from the year-ago period.

Steps taken to address transit delays and port issues include adding extra lead time to orders, chartering vessels, rerouting deliveries to ports that are less congested and expanding overnight hours at key U.S. ports, Biggs said. Walmart CEO Douglas McMillon was one of a quartet of executives on a call last week with President Biden to address Q4 supply chain issues, also including leaders from Target, UPS and FedEx.

“Despite the various macro and industry challenges, our inventory position is good,” he said. “Stores and fulfillment centers are well-staffed and our price position remains strong. Customers should expect to find the items they want at great values, and we are ready to serve them however they want to shop.”

Acknowledging the negative impact of ongoing global supply chain issues, Biggs said Walmart’s U.S. gross margin decreased slightly in Q3, by 0.12%, due to the increased costs.

“We’re seeing inflationary cost pressures in some areas, and our merchants remain laser focused on taking the necessary steps to mitigate supply chain congestion while working with suppliers in monitoring price gaps to manage margins appropriately,” he said. “Lower markdowns and increased contributions from advertising revenue have helped offset cost pressures.”

The marketplace added 21 million new items in Q3, bringing the total to 160 million SKUs. While a huge number, Amazon’s marketplace has more than twice that figure at about 350 million SKUs, between its own goods and third-party sellers, according to BigCommerce.

Biggs said the company was excited about the progress of its Walmart Fulfilment Services offering for third-party sellers, its version of Fulfillment By Amazon (FBA), adding the company’s scaled-up supply chain services are used in support of it.

“We can scale that business just about as quickly as we’ll be able to add capacity,” he said. “We’ve talked about supply chain a number of times this year, but we’ve got a lot of innovation and investments in the supply chain that we’re very excited about to add capacity for the overall network. But this certainly will include and support our marketplace sellers and have a great seller value proposition as we look forward.”

Overall, Walmart’s total revenue was $140.5 billion, up 4.3% and outpacing analysts’ expectation of $135.6 billion. Same-store sales gained a healthy 9.2%, up 15.6% compared to 2019. Adjusted earnings per share was $1.45, ahead of the consensus figure of $1.40.