Walmart (WMT) earnings Q4 2023
Customers exit a Walmart store on January 24, 2023 in Miami, Florida. Walmart announced in early March that it would raise the minimum wage for store employees, with store employees earning between $14 and $19 an hour.
Joe Raedle | News from Getty Images | Getty Images
Walmart beat earnings expectations for the holiday quarter as the discounter said it was attracting value-conscious shoppers looking for groceries, gifts and household items at a lower price.
Shares were little changed on Tuesday after the major retailer issued a weaker-than-expected outlook for the year ahead.
The company expects Walmart US same-store sales to rise between 2% and 2.5% excluding fuel in the upcoming fiscal year. That’s below analysts’ expectations for 3% growth, according to StreetAccount. Adjusted earnings per share are expected to be between $5.90 and $6.05, excluding fuel.
Walmart CFO John David Rainey told CNBC that shoppers are still buying fewer items as grocery prices remain high. He said this has been factored into Walmart’s forecasts for the coming year.
“The consumer is still under a lot of pressure,” he said. “And if you look at the economic indicators, balance sheets are getting thinner and savings rates are declining compared to previous periods. So we’re quite cautious about the rest of the year.”
home depot, which reported results for the fiscal fourth quarter on Tuesday morning, also shared a muted outlook. Same-store sales are expected to remain roughly flat in the coming fiscal year.
Here’s what Walmart reported for the fourth fiscal quarter ended Jan. 31, according to Refinitiv consensus estimates:
- Earnings per share: $1.71 adjusted versus $1.51 expected
- Revenue: $164.05 billion versus $159.72 billion expected
Walmart reported net income of $6.28 billion, or $2.32, up from $3.56 billion, or $1.28, a year earlier.
Revenue of $164 billion represented a year-over-year increase of 7.3%.
Same-store sales for Walmart US rose 8.3%, excluding fuel. The top industry metric that includes sales from stores and clubs that have been open for at least a year. E-commerce sales up 17% year over year at Walmart US
At Sam’s Club, same-store sales were up 12.2%, excluding fuel.
The company isn’t just the country’s largest retailer. It’s also a food powerhouse, a factor that has stabilized sales and boosted foot traffic as Americans budget-wise amid high inflation.
Walmart’s solid reputation has helped the retailer — as has its large grocery store. It is the country’s top-selling grocer. The prices of these foods have attracted new customers from all income brackets.
During the holiday quarter, Walmart’s stock gains also came from low- and middle-income shoppers
Walmart has made strides with a headache that has plagued many retailers: a deluge of unsold merchandise piling up in store backrooms and ending up on clearance shelves. Inventory is roughly flat from a year ago, Rainey said, and is down 3% at Walmart US
Walmart shares closed at $146.44 on Friday, bringing the company’s market cap to nearly $395 billion. The company’s shares are up about 3% so far this year, underperforming the S&P 500’s roughly 6% gain over the same period.