It is the third consecutive quarter Wal-Mart Stores Inc sees a double-digit online growth, pushing back hard against Amazon after years of trailing behind. Experts noted the largest retailer in the world benefits from the last year’s $3.3-billion acquisition of Jet. Com.
Peter Benedict of the Baird Equity Research noted it is the first time the brick-and-mortar retailer is “playing offense.” In Q4, online sales surged 29%, and shares wnet up 3.9% to $72.07 on Tuesday.
Nevertheless, Amazon.com is still the king of the online market, but Wal-Mart is catching up. The retailer also plans to purchase the outdoor e-tailer Moosejaw and the ShoeBuy.com. In addition, Wal-mart allowed Jet.com boss Marc Lore to run its online business.
Lore preciously worked for Amazon after the e-commerce behemoth purchased his other business, Quidsi. Moreover, the Jet.com boss is considered the second-smartest person to run an online venture after Amazon’s founder Jeff Bezos.
“He relishes the challenge of taking on Amazon,”
Michelle Grant of the Euromonitor International recently told Bloomberg.
However, Wal-Mart has a lot to do to topple Amazon. According to a recent survey, 75% of Wal-Mart shoppers purchased something on Amazon during the winter season. The figure is an increase from 2014 levels, when two-thirds of shoppers said a similar thing, and a sign Wal-Mart is hemorrhaging customers.
Lore recently said in an interview that the company was content with the current pace of moving, but there is still a lot to do. Lore added that the company might do other acquisitions.
Wal-Mart stores’ performance was less impressive but it did topped analysts’ expectations for the quarter. In the U.S.A., same-store sales rose 1.8%, while the initial forecast was 1.3%. Analysts underlined that this is the largest increase in the last four years. Additionally, earning per share climbed to $1.30, despite amalysts’ $1.29 per share prediction.
Other U.S. retailers didn’t fare so well over the last quarter. Target Corp for instance reported a disappointing performance as customer traffic badly hurt in-store sales. The company said it would offer the full results next week.
The industry is now concerned a border tax on Mexican and Chinese goods might push prices up. Retail trade groups have been trying to persuade Washington to scrap the measure ever since the President’s inauguration.
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