Walmart (WMT) Acquires Parcel To Expand In Delivery Space

It seems that Wal-Mart Stores Inc. (NYSE:WMT) is leaving no stone unturned to make its presence felt in the delivery space. In this regard, Walmart recently acquired a delivery startup Parcel, Inc. for an undisclosed sum. New York-based Parcel is a last-mile 24/7 delivery service which specializes in same-day delivery for perishable and non-perishable products. This will thus aid the retail giant to compete with e-commerce biggie Amazon.com, Inc. (NASDAQ:AMZN) in delivering everyday items as well as food and groceries from Walmart and Jet.com. Post the acquisition, Parcel will continue to operate from New York headquarters and deliver to its current as well as new clients. With Walmart’s wide scale of operations, Parcel is also expected to gain new customers.

Walmart’s Acquisition Spree in E-Commerce

Walmart has undertaken many acquisitions to grow its e-commerce business. Since Jet.com acquisition in September 2016, the company acquired four e-commerce businesses — Bonobos, ShoeBuy, Moosejaw, ModCloth. Recently, the company plans to invest in online cosmetics startup Birchbox. If the deal materializes, it will become the fifth e-commerce acquisition, since the Jet.com buyout.

The acquisition of Parcel is expected to help the company in a significant way, given the rising popularity of online grocery shopping and delivery. Notably, this booming industry is worth $10.9 billion in the United States, and Walmart is aggressively trying to get a share of the pie. This Bentonville, AR-based retailer has already partnered with ride hailing services Uber and Lyft for speedy online grocery deliveries and is also seeking drones for delivery and for use in warehouses, following the footsteps of Amazon. Recently, the retailer is testing a delivery service in partnership with San Francisco-based smart-lock maker August Home and Menlo Park-based same-day delivery startup Deliv, wherein customers can get groceries delivered to their fridge directly.

Wal-Mart Stores, Inc. Price, Consensus and EPS Surprise

Wal-Mart Stores, Inc. Price, Consensus and EPS Surprise | Wal-Mart Stores, Inc. Quote

Other Initiatives to Take on Amazon

The battle between Walmart and Amazon is not only limited to online grocery delivery and pick up services it has also been extended to gaining share of lower-priced private label brands. Walmart, through its online arm Jet.com, has recently announced plans to launch its own private-label brand, Uniquely J, targeting young urban adults. The move came after Amazon gained access of Whole Foods’ 365 brands after its acquisition in August. In the same month, the giant retailer also teamed up with Alphabet Inc.'s (NASDAQ:GOOGL) Google to enter the budding voice-shopping market, following the footsteps of Amazon.

If we look into the year-to-date performance, we note that Walmart’s shares have rallied 13.5%, higher than the industry, which grew around 6.0%.

Zacks Ranks & Key Pick

Walmart currently carries a Zacks Rank #3 (Hold).

A better-ranked stock in the retail space is Canada Goose Holdings Inc. (NYSE:GOOS) , carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Canada Goose has an expected earnings growth of 34.1%, for the next three to five years.

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