Strong growth in groceries sold online significantly boosted the online growth totals. But Walmart expects to keep losing money online this year.

Walmart Inc., No. 3 in the 2019 Digital Commerce 360 Top 1000, increased online sales 37% for its fiscal year 2020, which ended Jan. 31, and 35% for the fourth quarter, the company reports. Strong growth in groceries sold online —for pickup and delivery—significantly boosted those totals.

Walmart reports its ecommerce business during the vital fourth quarter “had strong growth in grocery pickup and delivery, and had its highest quarterly growth rate of the year,” but did not provide dollar amounts.

A Walmart spokesman says the company has not broken out how much of Walmart’s ecommerce growth is attributable to grocery sales and declined to comment on how much of the retailer’s online growth is due to that product category. But in his remarks to analysts during a webcast held today, Brett Biggs, chief financial officer, indicated Walmart continues to lose money selling online and expects that to continue into the new fiscal year.

“With regards to Walmart U.S. ecommerce profitability, we expect losses this year to be flat to slightly lower versus last year,” Biggs said.


Walmart has invested heavily in grocery pickup and delivery, its report indicates. The retail giant ended the fiscal year 2020 with about 3,200 grocery pickup locations and 1,600 grocery delivery locations, it reported. At the end of fiscal 2019, those totals were about 2,100 and nearly 800 locations, respectively. Walmart also launched same-day pickup nationwide at Sam’s Club unit during the past year.

“Overall [ecommerce] performed above expectations, while stores did miss,” Oliver Chen, managing director and senior equity research analyst at investment firm Cowen and Co. LLC, said in a note to investors. “More specifically, the quarter went mostly according to plan, although several weeks leading up to Christmas were weaker than expected. Management pointed to several factors including too much focus on opening price points and leaning too heavily into seasonal apparel,” the note says.

Chen cited Walmart’s projected ecommerce growth as a positive factor. However, Walmart’s comparable-store sales grew just 1.9% for the fourth quarter, significantly below Cowen’s 2.6% estimate. Cowen rates Walmart as “outperform,” meaning the firm expects the stock to achieve a total positive return of at least 15% over the next 12 months.


In mid-2019, Walmart launched Delivery Unlimited, a grocery delivery membership option that competes with Instacart’s Express service, Target Corp.’s Shipt service and Inc.’s Prime Now service. Delivery Unlimited’s service offers unlimited grocery deliveries for a $98 annual fee or a monthly cost of $12.95. After testing the service in Houston, Miami, Salt Lake City and Tampa, Walmart last fall expanded Delivery Unlimited to include more than 1,600 stores and more than 50% of the country.

Walmart’s status outside of grocery

Beyond its grocery operation, Walmart has tweaked its online strategy. For example, its Jetblack personal-shopping service for busy urban families will cease operations Feb. 21, a company spokesman said earlier this month. Also, Walmart’s urban-focused unit has been fully integrated into the parent company, prompting many of Jet’s top employees to find new roles outside of its headquarters in Hoboken, New Jersey.

Jetblack will terminate 300 employees with 58 staying on with Walmart, the spokesman said. The decision comes after discussions to sell the money-losing unit fizzled, a person familiar with the talks said.

Last fall, Walmart sold the assets of digitally native women’s fashion retailer ModCloth to Go Global Retail, a brand investment platform that has worked with companies such as VF Corp. and Billabong, according to its website. Terms of the deal were not disclosed. That move came roughly two-and-a-half years after Walmart bought ModCloth as part of a spending spree that also included men’s online apparel retailer Bonobos and Eloquii, which sells women’s plus-size clothing online. At about the same time it sold ModCloth, Bonobos said it would lay off employees.

Experts say Walmart seeks to rein in its ecommerce losses expected to reach $1.7 billion in 2019, according to a Morgan Stanley estimate—up from an estimated $1.4 billion in 2018.

Highlights of the financial results include:

  • For the fourth quarter, Walmart’s revenue rose 2.1% year over year to $141.671 billion, from $138.793 billion a year earlier. Net income was $4.294 billion, up 12.6% from $3.813 billion for the year-ago quarter.
  • Total revenue for the year was $523.964 billion, an increase of 1.9% from $514.405 billion the previous year. Net income for fiscal 2020 was $14.881 billion, up 123.1% compared with $6.670 billion a year earlier. Last year’s net-income results were affected by a $4.8 billion pre-tax loss related to the sale of a majority stake in Walmart Brazil and other factors.
  • Operating income for the quarter was $5.322 billion, down 12.3% from $6.067 billion a year earlier. For the year, operating income was $20.568 billion, down 6.3% from $21.957 billion a year earlier.

“We started and finished the quarter with momentum, while sales leading up to Christmas in our U.S. stores were a little softer than expected,” president and CEO Doug McMillon said in a statement. “The new year has started off well, and we look forward to another strong year. We remain focused on providing our customers with the best omnichannel experience from any retailer.”


Looking forward to fiscal 2021, Walmart says it expects ecommerce sales to grow 30%. The company also expects overall sales growth of about 3%—excluding any impact from currency fluctuations. The company also intends to make about $11 billion in capital expenditures, with a focus on store remodeling, “customer initiatives,” ecommerce, technology and supply chain improvements.

For Walmart’s Sam’s Club wholesale club unit, comparable store sales increased 0.8%, and ecommerce sales grew 33%. Reduced tobacco sales negatively affected comparable sales by approximately 300 basis points, the company reported.