Walmart on Thursday credited continued momentum in e-commerce and fast delivery with helping to drive 5.9% revenue growth during the second quarter, highlighting speed as a feature that attracts more online sales.
But U.S. comparable sales growth slowed from 4.6% a year ago to 2.6% and sales guidance was lower than the second half of the previous fiscal year.
The retail giant’s global e-commerce sales increased 23%, year over year, indicating consumer preference for convenient, quick commerce.
At Walmart U.S., (NASDAQ: WMT) e-commerce sales grew 24%. Deliveries fulfilled from local stores increased 43% alongside more than 50% growth in marketplace net sales. It was the 10th consecutive quarter of e-commerce growth over 20% for the domestic unit. Using stores as fulfillment centers, combined with freelance drivers using its Spark app, allows Walmart to achieve faster delivery speeds on a broad assortment of goods. Expedited delivery — those under three hours — represented 37% of store-fulfilled orders, according to the company’s earnings report. And 70% of online orders are delivered the same day.
E-commerce sales now represent over 23% of Walmart U.S.’s revenue mix, double the level from just five years ago. Over the past 18 months, U.S. e-commerce incremental margins have been in the high-single to low double-digit range.
E-commerce sales at Sam’s Club were up 26% with strong growth in club-fulfilled pickup-and-delivery, Walmart said. In early April, Sam’s Club launched an express delivery service from local stores, with items arriving in as soon as one hour.
Digital also enabled growth at Walmart International. E-commerce sales increased 19%, with strong improvements in China, India and Canada. E-commerce represents 30% of sales for the international unit.
“Walmart’s results tell two different stories. Consumers are being more cautious and overall sales growth slowed, but Walmart’s U.S. e-commerce business still grew 24%, showing that shoppers continue to respond when value and convenience come together. Walmart is getting products to customers faster and also doing a better job of showing shoppers the delivery promise before they make a purchase,” said Owen Carr, chief merchandising officer for Spreetail, a third-party seller on Walmart.com. “We have seen our own delivery times shorten and conversion increase as customers take advantage of that faster shipping. That is especially meaningful for larger products, where long delivery windows have historically been a barrier to buying online.”
