Walmart Reports Stronger Than Expected Q4 Results Driven by E-commerce Growth

Big-box retailer Walmart, the largest retailer in the world, has reported its fourth quarter financial results this week that were stronger than expected.

The company saw revenue and sales explode, helped in part by strong e-commerce growth that skyrocketed during the pandemic.

Despite this, the company saw its shares drop as Wall Street digested a warning about potentially weaker sales in the coming year, attributed to costs associated with a pay hike that frontline workers at the company will be receiving.

For the fourth quarter, Walmart reported adjusted EPS of $1.39. This is below the EPS of $1.50 according to Bloomberg.

Revenue at $152.1 billion was higher than the $148.39 billion expected, per Bloomberg.
The company saw U.S. comp-store sales (excluding gas) at 8.6% compared to the 5% estimates.

E-commerce sales for the company came in at 69%.

For the fiscal 2021 year, Walmart reported total revenue of $559.2 billion. This was up $35.2 billion, or 6.7% from a year ago.

For the quarter, the closely-followed same-store sales figure came in at 8.6% in the U.S., versus estimates of 5% growth.

Looking ahead, in its fiscal 2022 full-year guidance, Walmart said it expects U.S. same-store sales, excluding gas, to grow in the low-single digits. It also expects consolidated net sales growth to be up in the low single-digits.

“Assumptions in the guidance are dependent upon the duration and intensity of the COVID-19 health crisis globally, timing and effectiveness of global vaccines, the scale and duration of economic stimulus, employment trends and consumer confidence,” the company said.

CFO Brett Biggs said he expects the FY22 quarterly profit growth cadence versus the prior year “to be quite variable,” citing COVID-19-related expense and profit timing as well as international transactions. He also said he expects Q1 operating income “to be relatively flat to last year, and EPS to be flat to slightly up,” reflecting the presence of Asda in its financials for about half the quarter, and some tax rate fluctuations.

“Again, and I probably can’t stress this enough, we’re in a very unusual time, causing projections even in the short-term to be very challenging and open to significant fluctuation,” Biggs said.

Walmart recently announced pay increases for approximately 28% of its hourly store associates.

Walmart associates “stepped up to serve our customers and members exceptionally well during a busy holiday period in the midst of a pandemic. Change in retail accelerated in 2020. The capabilities we’ve built in previous years put us ahead, and we’re going to stay ahead,” Walmart CEO Doug McMillon said.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.