Walmart's mix of bricks and clicks is working
The company says it is continuing to make investments to improve stores, lower prices and boost online shopping capabilities.
"We're transforming to become more of a digital enterprise," said Walmart CEO Doug McMillon in a call for investors. "We're moving faster to combine our digital and physical assets to make shopping easier and more enjoyable for customers."
Walmart U.S. e-commerce chief Marc Lore said the company is seeing “nice growth” from its latest offer of discounts on some web orders that are picked up in store. It now offers curbside pickup of online grocery in 670 locations.
For the first quarter ended April 30, the retailer reported a 63% increase in online growth, same store sales grew 1.4%, driven by a traffic increase of 1.5%.
“Q1 was a solid quarter for Walmart on multiple fronts as margins held steady despite the myriad ongoing investments in people, technology and price,” said Moody’s Lead Analyst Charlie O’Shea. “The positive impact of Jet.com on the online business is significant, with our view that the level of acceleration will continue to widen the gap between Walmart and its brick-and-mortar competitors."
Total revenue at Walmart was $117.5 billion, an increase of 1.4%. Excluding currency2, total revenue was $118.8 billion, an increase of 2.5%.
“Working capital initiatives continue to bear fruit, with year-over inventories down over $1 billion and payables up almost $3.5 billion, and we also note debt balances are down over $3.5 billion year-over-year, which provides Walmart with additional financial flexibility as it continues with its multi-year investment program,” continued O’Shea. “In addition, given the current retail landscape, with many retailers experiencing challenges across multiple categories, we believe Walmart will continue to turn up the competitive heat by utilizing its scale and technological advantages to extract increased market share.”
Net sales at Walmart International were $27.1 billion, a decrease of 3.5%. Excluding currency, net sales were $28.3 billion, an increase of 0.8%.
The company generated $5.4 billion in operating cash flow and returned $3.7 billion to shareholders through dividends and share repurchases.