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E-commerce Is the Real Star of Walmart's Earnings

Douglas A. McIntyre

Published: August 16, 2024 6:40 am

24/7 Wall St. Insights

• The Walmart Inc. (NYSE: WMT) quarterly report showed that its e-commerce is growing rapidly.
• The retailer has withstood the threat from Amazon.com Inc. (NASDAQ: AMZN).
• Also: Dividend legends to hold forever.

Walmart Inc. (NYSE: WMT) earnings smashed expectations, and the company showed why it is America’s largest retailer. Buried in the quarterly results were the e-commerce numbers. What the company calls Global Ecommerce grew 21% year over year, against an overall revenue increase of 4.8% to $169.3 billion.

Walmart’s e-commerce business is somewhat different than that of Amazon.com Inc. (NASDAQ: AMZN). Walmart’s was driven by store-fulfilled pick-up and delivery. With 5,025 stores in the United States, the company says that 90% of America’s population lives within 10 miles of one of its stores.

Among the keys to Walmart’s e-commerce business is that it saves customers time. They can order what they need online, drive to a special spot at a Walmart store, and have their entire order within minutes. This contrasts with ordering online for merchandise shipped to homes, which can take two to five days. More important for most people is that they do not have to take the time to go into a store to shop. They do not have to park, walk through a store to find what they need, and then stand in what can be a long checkout line.

Twenty years ago, it was assumed that Amazon would take away a huge amount of Walmart’s business. Amazon was easy to shop at, and people could get their orders quickly, sometimes overnight. Walmart has developed a system that is even better in many cases.

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