Walmart had a blowout holiday quarter

Walmart’s all-important holiday sales blew past expectations, a sign the retailer can more than hold its ground against Amazon.

Same-store sales in the United States grew 4.2% over the holiday stretch compared with last year, including a 43% rise in digital sales.

Walmart said its online sales got a boost from rolling out grocery pickup to stores across the country. It also expanded delivery to reach more shoppers. More than 10% of Walmart shoppers used curbside pickup in January, according to data from Cowen.

Walmart’s online sales increased quickly after it added pickup and delivery to some stores and acquired new digital clothing brands like Eloquii and lingerie retailer Bare Necessities.

Walmart will invest in growing online instead of opening up physical stores.

The company only plans to open 10 new stores this year. It already has more than 4,700 US stores, and more than 90% of the country lives within 10 miles of a Walmart.

Walmart has shifted its strategy to adapt to its real estate slowdown. It will rely more on digital growth and will continue to lean on its biggest business, groceries, to drive sales.

Walmart plans to bring curbside pickup to around 1,000 more stores this year, but predicts that online sales growth will slow to 35%.

Low unemployment, rising wages, and a drop in gas prices helped Walmart during the holidays. The government shutdown also had a positive impact on Walmart’s earnings because February SNAP benefits were doled out early. That led to a 0.4% rise in sales, Walmart said.

The company also stocked up on toys to lure shoppers during the first holiday season in years without Toys “R” Us. Those efforts paid off.

Walmart’s strong holiday should calm fears about a troubling report from the Commerce Department last week, which showed core retail sales plummeted 1.7% in December, the most in nearly two decades.

Wall Street shrugged off worries about new regulations in India. Walmart bought online retailer Flipkart for $16 billion a year ago.

Walmart’s stock jumped 3% in early trading Tuesday.

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