By Phil Wahba
February 19, 2019

Walmart Inc’s (wmt)strong holiday season numbers should lay to rest once and for all any doubt that stores are any retailer’s bulwark against Amazon.com.

The company said on Tuesday that comparable sales at its U.S. namesake stores rose 4.2% in the holiday season quarter that ended in late January, making for its best holiday season in years. Its Sam’s Club warehouse club business, the 7th largest U.S. retailer in its own right, also enjoyed a good quarter, with its comparable sales rising 3.3%. The results come a few weeks after Target reported its best November-December performance in years. (It reports full quarter results in early March.)

For Walmart U.S., a $300 billion-a-year business, its was the 18th quarter in a row of growth. So how did Walmart do it? By fully leveraging the asset Amazon can only dream of: its network of 4,000-plus stores, into which it has poured billions in the last few years, often giving investors heartburn, to set them up to ship items, hold orders for pickup, enable store workers to do in-aisle checkout, as well as simply make stores look better. (Big investments at Sam’s Club and Target to integrate the digital and the physical are yielding similar payoffs, as they are at a number of other chains.)

More crucially, 2,100 stores (3,100 by the end of the year) allow for grocery pickup and another 800 offering delivery. (That will be 3,100 and 1,600 locations respectively by year-end.) When you realize that Walmart gets 56% of its sales from grocery, and Amazon is still figuring out what to do with Whole Foods, that’s no small matter. Indeed, comparable sales in grocery rose by a mid-single-digit percentage, no small feat when you look at the digital efforts of Amazon, Whole Foods, Kroger and others.

In other areas, Walmart also helped itself with moves like by expanding its toy selection by 40% for the holiday season, picking up a lot of business that would have gone to Toys ‘R’ Us. And it addressed the logistical snafus that had cost it sales in the 2017 holiday season.

Walmart’s e-commerce sales rose 43% during the quarter, belying another myth: that e-commerce and stores sales are in competition with each other. It redesigned its own web site to make it more inviting and less about mere transactions, with areas that simplify browsing for furniture as well as online shops for brands like HBC’s Lord & Taylor and sports gear online store Fanatics. (Walmart has continued its shopping spree of e-commerce players, adding Eloquii and Bare Necessities last year, though the company does not break out how much such brands add to its overall digital business.)

The company’s shares rose 4% on the strong results, bringing its market cap above $300 billion again.

What Walmart strong holiday quarter ultimately proves, or rather re-confirms, is that any retailer that invests both in its stores and e-commerce, lines up new merchandise and speeds up its metabolism can thrive in this Amazon era and more than hold its own.

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