Gene J. Puskar / AP
Saturday, Aug. 18, 2018 | 2 a.m.
Walmart’s many efforts to bolster its food shopping services — including letting customers order online and pick up in person, expanding its home delivery of groceries, even experimenting with robots — appear to be paying off, the company said Thursday.
The company, the largest grocer in the United States with a 23 percent share of the market, said that the grocery division’s performance last quarter was its best in nine years, propelling a crucial measure of sales to its largest increase in a decade.
The results pushed Walmart’s stock up more than 10 percent, and were described in a note from Stifel analysts as “impressive.”
Walmart said Thursday that it expected to offer home delivery of groceries to 40 percent of the U.S. population by the end of the year. It has expanded its service that provides curbside pickup of food orders to 1,800 stores. And it recently announced a pilot project to use automated carts to help employees speedily retrieve items for customers’ online orders.
This month, Walmart’s battle with the rival Amazon escalated after the online giant announced a similar grocery pickup service at its Whole Foods stores. The intense competition has left many smaller grocery operators flailing.
Walmart’s online grocery strategy has required the company to combine its vast inventory with a digital infrastructure that has often been less than inspiring to customers.
But after the company redesigned its website, its e-commerce sales in the United States increased 40 percent in the second quarter from a year earlier, an improvement from the 33 percent upswing it reported over the previous three-month period. The company is betting big on its online baby products segment, where it has added 30,000 new products this year.
During the quarter, as retail sales rose nationwide, more shoppers visited Walmart’s brick-and-mortar stores and spent more while there compared with the year-earlier period. Executives credited factors such as healthy consumer confidence and better weather.
Sales in stores open at least a year were up 4.5 percent nationwide, far exceeding analysts’ forecasts. The strong results led the company to raise its sales and profit expectations for the year.
“The business feels solid, the foundation feels good,” said Greg Foran, chief executive of Walmart U.S., in a conference call with reporters.
Apparel sales were also robust, Walmart said. The company has partnered with or acquired more upscale names like Lord & Taylor and Bonobos to try to elevate its clothing offerings. On Wednesday, the chain said it would introduce a fashion line from talk show host Ellen DeGeneres.
The mega-retailer said that revenue increased 3.8 percent from a year ago to $128 billion. It reported $1.29 in earnings per share excluding one-time items, such as a loss stemming from a sale of its majority stake in Walmart Brazil.
The company said it was still waiting for its risky acquisition of Flipkart, the Indian e-commerce service, to close. The $16 billion deal to buy 77 percent of the company, one of several recent purchases intended to remake Walmart as a more tech-savvy and high-end retailer, was announced in May.