Walmart paid $3.3 billion for Jet.com four years ago. Now, it’s shutting the site down.
But Chief Executive Doug McMillon said, given the chance, he would do that deal a second time.
“Absolutely … would do that all over again,” McMillon told CNBC’s Becky Quick in an exclusive interview Wednesday morning. “If you look at the trajectory of our business, it changed when we made that acquisition.”
“Not only did we pick up Marc Lore … we picked up fulfillment centers — a lot of expertise that ended up paying off,” he said.
As a result of the deal, McMillon went on, the Walmart brand is now reaching younger and more affluent customers, and also has been able to bring new brands, such as water bottle maker Swell, to Walmart.com. “That was the other role that I thought Jet was going to play,” the CEO said. Brands are more “comfortable,” selling on Walmart now, he said.
Critics have argued, however, that Jet.com was only a money-losing venture for Walmart.
Trying to play catch up with Amazon, adding faster shipping options and more third-party sellers, has resulted in a string of investments and expenses that have been a drag on the profitability of Walmart’s bricks-and-mortar shops.
On Tuesday, Walmart reported quarterly earnings, revealing that its e-commerce sales in the U.S. shot up by 74%, and same-store sales grew by 10% in the first quarter.
But there is also a price to pay, being the biggest private employer in the U.S. operating during a pandemic. The company said it spent nearly $900 million on expenses related to the Covid-19 crisis, with about three-fourths of that devoted to employee bonuses and expanded benefits.
McMillon said Wednesday that Walmart has seen notable spikes in discretionary categories like adult bikes and craft supplies, after the government sent out stimulus checks to aid American households during the pandemic.
“If the consumer generally feels like they are going to have a job … access to money … we will see them spend that,” he told Quick.
Walmart shares as of Tuesday’s market close, Walmart shares are up about 5% this year. Walmart’s market cap is roughly $354.1 billion.
—CNBC’s Melissa Repko contributed to this reporting.