Wal-Mart's Online Sales Soar as Retail Giant Pursues Amazon

Wal-Mart gained momentum in its fight against Amazon, with its online sales growing at the fastest clip in at least five years, according to Bloomberg.

The e-commerce business saw gross merchandise volume, a measure of all the goods it sells online, soar 69 percent in the first quarter, Wal-Mart said. Total revenue climbed 1.4 percent to $117.5 billion.

The results signal that Wal-Mart is getting a payoff from an ambitious online expansion, which included last year’s $3.3 billion acquisition of Jet. The Bentonville, Arkansas-based company now boasts 50 million items on its website, up from 35 million the previous quarter.

Growth at Wal-Mart’s brick-and-mortar stores was more measured, though it still outpaced estimates. U.S. same-store sales rose 1.4 percent, beating the 1.3 percent gain projected by analysts. That marked the 11th-consecutive period of positive sales in the company’s home market.

Earnings amounted to $1 a share in the period, which ended April 30. Analysts had estimated 96 cents. The company expects profit of $1 to $1.08 in the second quarter, compared with a projection of $1.07. U.S. same-store sales will grow 1.5 percent to 2 percent, Wal-Mart said. “We’re encouraged by the start to the year,“ CEO Doug McMillon said in a statement. “Our plan is gaining traction.“

McMillon has used the Jet acquisition as a catalyst for online growth. After buying that business in September, he put co-founder Marc Lore in charge of U.S. e-commerce. Wal-Mart followed up with some smaller deals, snapping up outdoor retailer Moosejaw and women’s apparel seller ModCloth earlier this year. It’s also held talks to buy men’s clothing startup Bonobos for about $300 million.

The deals have helped burnish Wal-Mart’s online image, though the majority of e-commerce growth came from its longstanding site last quarter. Wal-Mart’s online expansion hasn’t come cheap. Its expenses grew faster than sales in the first quarter, CFO Brett Biggs said in an interview. Wal-Mart has pledged to reverse that trend over the course of the year. “We’re still not where we want to be,“ Biggs said.