Walmart reported 33% growth in U.S. ecommerce in Q1 with online grocery being an attributing factor to the growth. Total revenue was $122.7 billion, an increase of $5.1 billion or 4.4%.
“We are really pleased with the performance in Q1 for our U.S. ecommerce business,” said Kary Brunner, director of investors relations for Walmart in an earnings call. “We’re seeing good momentum with the right assortment and the right pricing supported by marketing.”
Brunner said the expansion of online grocery sales and delivery was one of several initiatives that contributed to the strong ecommerce growth in the quarter.
“We think a combination of executing the fundamentals of ecommerce and continuing to make progress there will help us achieve our full year net sales,” said Brunner.
The ecommerce results were welcome news for Walmart and skittish investors after Q4 growth dropped by more than half from previous periods to 23%; the average had been above 50%.
Walmart CEO Doug McMillon said in February that “operational challenges” including inventory overstock led to the decline during the critical holiday period. The overall sales growth in 2017 was a strong 40%.
Marc Lore, Walmart’s CEO of U.S. ecommerce, did not provide detail on those challenges during a keynote at ShopTalk in March, but did say the drop-off was “planned.” Lore added Walmart will add 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 by the end of the year.
Echoing Lore, Brunner also said Walmart wasn’t surprised by the seasonal hit in ecommerce growth. “We planned to be down in Q4 relative to prior years due to some promotional approach years prior,” he said. “So really to create a better, healthier top- and bottom-line mix in certain categories in ecommerce, that was the primary driver of the headwinds there.”
Brunner said new initiatives have been rolled out recently including the website redesign and expanded grocery pickup and delivery locations.