The addition of online marketplace helped Wal-Mart boost its gross merchandise value 36%.

Wal-Mart Stores Inc.’s acquisition of online marketplace helped boost the retailer’s fourth quarter sales and made the retail giant optimistic about its direction.

Wal-Mart, No. 4 in the Internet Retailer 2016 Top 500 Guide, reported U.S. online sales grew 29.0% year over year during the fiscal fourth quarter ended Jan. 27, while gross merchandise value—the overall value of goods sold on its e-commerce sites—rose 36.1% year over year. Both gains were driven in part by sales on online marketplace as well as online grocery sales. Wal-Mart acquired Jet for $3.3 billion in August, and the fourth quarter was the first full quarter with Jet’s sales integrated with Wal-Mart’s.

“We’re leveraging the strengths of Wal-Mart and Jet to make both platforms better,” Wal-Mart CEO Doug McMillon said on the retailer’s earnings call, according to a transcript from Seeking Alpha. “We continue to invest in e-commerce to accelerate growth. We’re gaining traction and moving faster.”

Wal-Mart did not break out e-commerce sales figures in the dollars for the year, but CFO Brett Biggs told analysts on the call that e-commerce sales globally grew 15.5% in fiscal 2017 compared to 2016 when accounting for foreign currency fluctuations. Based on what Wal-Mart has reported in the past, that would mean online sales reached roughly $15.82 billion last year, up from $13.70 billion in the prior year.

Biggs also said global GMV for all Wal-Mart-owned e-commerce properties increased 17.5% year-over-year. Excluding Yihaodian, the Chinese online marketplace Wal-Mart sold to in June 2016, global GMV grew 29.7%. Wal-Mart does not break out Jet’s sales and a spokeswoman could not be reached for additional comment.


Analysts say they’re pleased with what they’ve seen so far of the marriage between Jet and Wal-Mart.

“As becomes more fully-absorbed on multiple fronts, we believe Wal-Mart is well-positioned to assume a firm online leadership position among brick-and-mortar retailers,” writes Charlie O’Shea, Moody’s lead retail analyst.

Read  more: Why some experts see Wal-Mart ‘playing offense’ with Amazon

Jet is not the only major acquisition Wal-Mart has made recently.


The retailer in January acquired online shoe and apparel retailer ShoeBuy Inc. (No 101 in the Top 500) for $70 million and last week, it acquired outdoor apparel and equipment retailer Moosejaw (No. 261) for $51 million.

“The acquisitions of ShoeBuy and Moosejaw, in addition to Hayneedle, gave us immediate expertise and capabilities in new, more upscale categories of merchandise,” McMillon said. Jet bought home products e-retailer Hayneedle in February 2015 for an undisclosed price and was included in Wal-Mart’s acquisition of Jet.

While McMillon is bullish on the recent spate of acquisitions, some industry experts say that in order for those acquisitions to pay off, particularly in the case of Moosejaw, Wal-Mart needs to give the retailers it acquires space to innovate.

“The big question is whether Wal-Mart can actually leverage that innovation beyond those companies, and that very much remains to be seen,” says Nikki Baird, managing partner at retail consulting firm Retail Systems Research. “It would be all too easy for Wal-Mart to crush the innovative spirit of a company like Moosejaw—a spirit that has been irreverent and a bit ‘in your face’—when Wal-Mart has a lot more tendency to act very conservatively in talking to the market and its customers.”


The acquisitions are only one piece of a broader set of changes Wal-Mart has made to its e-commerce strategy.

The retailer last month dropped its ShippingPass program, which enabled shoppers to pay a $49 annual subscription fee in exchange for free two-day shipping on all online orders with no minimum. Wal-Mart’s new shipping policy offers free two-day shipping on all online orders of $35 and over.

“As you might expect, we’ve seen a nice uptick in our e-commerce business since this launch,” McMillon said, declining to specify a dollar figure or a percentage. Inc. (No. 1) recently matched Wal-Mart’s free shipping minimum by lowering the threshold for non-Prime members to $35 from $49, though Amazon promises delivery within five to eight business days on more than 50 million eligible items, compared with two to five days for Wal-Mart, which has more than 2 million eligible products.

Wal-Mart executives say the retailer’s stores are key to driving e-commerce growth.


Chief financial officer Brett Biggs told analysts on Wal-Mart’s earnings call that same-day in-store pickup of online orders grew 27% year over year during the holiday period of November and December.

“While e-commerce is growing rapidly, customers continue to rely on brick-and-mortar formats,” McMillon said. “The Supercenter remains the best retail format in the world, and going forward, we will continue to leverage these unique assets even more with initiatives like online grocery, in-store pickup and others. Rapid advances in technology mean we need to become more of a digital enterprise—and that’s what we’re doing.”

Wal-Mart also continues to expand its online marketplace, with McMillon telling analysts the retailer has more than 35 million items for sale on it, up more than fourfold from this time last year.


For the fiscal fourth quarter ended Jan. 27, Wal-Mart reported:

  • Net revenue of $130.936 billion, up 1.0% from $129.667 billion last year.
  • U.S. sales including e-commerce of $83.747 billion, up 2.8% from $81.462 billion.
  • Net income of $3.757 billion, down 17.9% from $4.574 billion last year.

For fiscal 2017, Wal-Mart reported:

  • Net revenue of $485.873 billion, up 0.8% from $482.130 billion last year.
  • U.S. sales including e-commerce of $307.833 billion, up 3.2% from $298.378 billion last year.
  • Net income of $13.643 billion, down 7.2% from $14.694 billion last year.