Walmart to lose $1B on US e-commerce business this year: Report
Walmart’s effort to ramp up its U.S. e-commerce operation to compete with Amazon has led to tension between some company and executives and had a significant negative impact on the company’s profitability, according to a report Wednesday.
The Arkansas-based retailer’s e-commerce business is set to record a $1 billion loss on revenue of between $21 billion and $22 billion this fiscal year, Vox reported, citing multiple sources familiar with the matter. At least three of Walmart’s recent digital brand acquisitions – Bonobos, ModCloth and Eloquii – remain unprofitable, the report added.
The division’s profitability issues have reportedly drawn the ire of Walmart CEO Doug McMillon and other top executives at the company, who are said to be pressuring Marc Lore, the Jet.com founder and current Walmart e-commerce chief, to cut down on losses. Walmart acquired Jet.com for more than $3 billion in 2016.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| WMT | WALMART INC. | 92.50 | +0.62 | +0.67% |
According to the report, Walmart is likely to sell ModCloth later this year at a loss compared to its acquisition cost of roughly $50 million. The company has also discussed a sale of Bonobos.
Walmart declined to comment on the report. Shares were flat in trading Wednesday.
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While Walmart’s digital sales have shown significant growth in recent years, the company still trails industry leader Amazon by a considerable margin. Amazon controls about 38 percent of the U.S. e-commerce market. Walmart has 4.7 percent share of the market.