Walmart yesterday released its results for the first quarter, saying that total revenue increased about seven percent $115.9 billion, while US same-store sales were up one percent, and profit was $3.08 billion, down from $3.34 billion a year earlier. The improved sales reflect stronger inventory controls and billions of dollars invested improved wages for US employees, the company said, as well as in the efficacy of a price cut program that Walmart has rolled out selectively and has bigger plans for in the near future.
The Wall Street Journal characterized Walmart's performance this way: "After a string of disappointing results from retailers including Target , J.C. Penney and Macy’s , the Wal-Mart numbers were a shot in the arm. Its stock climbed, with other retailers’ shares showing sympathy gains.
"But Wal-Mart’s first-quarter success may not reflect a better retailing environment than investors have lately been reckoning on. Rather it could signal a renewed willingness on Wal-Mart’s part to take back market share, even if it comes at the expense of slimmer profit margins."
And the New York Times wrote: "The results were particularly striking after dismal earnings reports by several retail chains last week, and Walmart’s shares shot up nearly 10 percent. Investments in everything from employee wages to store layouts had led to higher customer satisfaction, the company said. Shoppers filled more prescriptions, purchased more over-the-counter products and showed more of an appetite for apparel and other general merchandise."
However, CEO Doug McMillon conceded that a seven percent increase in e-commerce sales was "“too slow.” It was the lowest growth in e-commerce sales that Walmart ever has reported, the story said.
The Wall Street Journal characterized Walmart's performance this way: "After a string of disappointing results from retailers including Target , J.C. Penney and Macy’s , the Wal-Mart numbers were a shot in the arm. Its stock climbed, with other retailers’ shares showing sympathy gains.
"But Wal-Mart’s first-quarter success may not reflect a better retailing environment than investors have lately been reckoning on. Rather it could signal a renewed willingness on Wal-Mart’s part to take back market share, even if it comes at the expense of slimmer profit margins."
And the New York Times wrote: "The results were particularly striking after dismal earnings reports by several retail chains last week, and Walmart’s shares shot up nearly 10 percent. Investments in everything from employee wages to store layouts had led to higher customer satisfaction, the company said. Shoppers filled more prescriptions, purchased more over-the-counter products and showed more of an appetite for apparel and other general merchandise."
However, CEO Doug McMillon conceded that a seven percent increase in e-commerce sales was "“too slow.” It was the lowest growth in e-commerce sales that Walmart ever has reported, the story said.
- KC's View:
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The thing is, Walmart's e-commerce growth is less than the national average, and far less than Amazon's. Which means that despite the many millions of dollars spent on e-commerce, Walmart is losing ground in this segment ... and Amazon is putting even more distance between it and many of the other players.
I continue to believe that Walmart is in the position where at least in this segment, it has to make the big, sweeping, game-changing, needle-moving, strategic move that will redefine it. I'm not sure what that is ... but at least for the moment, the evidence suggests that what it is doing in e-commerce is not working to the degree Walmart needs it to.
