Walmart sees huge COVID-19 boost in online sales

U.S. Walmart sales jumped 10% in the first quarter, boosted by a 74% surge in online buying amid the coronavirus pandemic. Yahoo Finance's On The Move panel discusses.

Video Transcript

JULIE HYMAN: Well, in addition to that hearing today and hearing from Mnuchin and Powell, we also heard from a number of retailers. Walmart came out with earnings, and the company is spending a lot of money, but it's also making a lot in revenue. Its traffic-- foot traffic went down, but its e-commerce traffic went way back up.

Let's talk about this with our panel. Melody Hahm, obviously Walmart has sort of the inherent advantage of A, being open, right, right now, and also having a lot of stuff that people need right now for the whole essentials business.

MELODY HAHM: Exactly. E-comm sales did grow by 74% this quarter. As you alluded to, same-store sales did jump by 10% in the first quarter, which I think is actually lagging behind some of the previous quarters. But of course, as a lot of stores were implementing social distancing measures, you can't really have that much of a flurry in person. And of course, that contrasts with Kohl's, which didn't even provide same-store sales numbers because so many of their stores were closed.

What was really interesting to me this quarter, Julie, is that they are phasing out Jet.com. And of course, we remember that sort of splashy acquisition. Jet was focused on urban cities, specifically New York City. Remember that purple packaging?

And it was founded by Marc Lore, who had been an Amazon exec. He had run Diapers.com. And Jeff Bezos had acquired-- or acqui-hired him at the time. Marc Lore came back with a vengeance, saying, I'm going to take on all of these E-comm giants. He founded Jet.

And now, of course, he is still part of the Walmart executive team. But this just shows that it's just Walmart.com, right? They don't need to really have any of those tricks up their sleeve during this time, especially as a lot of non-Walmart customers are seeking out these stores for refuge for those essential supplies that perhaps previously they would have never thought to do.

JULIE HYMAN: Yeah. I mean, it was incredible to me because, much like Amazon, Walmart is spending a lot too, so that crimped the profitability. I mean, the number of people they hired, more than 250,000 people being hired to deal with all this extra traffic.

Also, Home Depot saw higher costs. It had the same sort of equation, where higher sales, higher costs, though, associated with those sales. Those shares are down about 2 and 1/2% today. So even if you have those essentials and-- and I think that's true for Home Depot as well, you didn't necessarily-- it wasn't the same for all of the players.

MELODY HAHM: Right. And it's also fascinating to me because Home Depot kind of went under the radar. We didn't necessarily tout Home Depot as one of those conglomerates that had done well by its employees, right? But as you point out, they did take various steps to boost wages, keep employees coming in during the pandemic, expanded paid time off.

I remember very early on in this pandemic, I called a bunch of Home Depot stores, and they were fully stocked when a lot of these other companies like Walmart and even amazon.com didn't have basic necessities. So yes, we so often talk about the Walmarts, and the Costcos, and the Amazons, but Home Depot, I think, stealthily has been trying to serve customers. But to your point, perhaps that chipped away at profitability this quarter.

JULIE HYMAN: Yeah. Also, speaking about workers, we learned this morning that Target was going to expend-- extend its sort of hazard/bonus pay for its workers to July 4, which, I believe, is longer than most of the other retailers out there. All right, thank you, Melody. Appreciate it.