A worker wearing a protective mask arranges his shopping baskets outside a Walmart store in Duarte, California, USA, on Thursday, November 12, 2020.
David Swanson | Bloomberg | Getty Images
Walmart’s fourth-quarter earnings were lower than expected on Wall Street on Thursday, as the retailer aims to turn the power of its e-commerce business during the pandemic into a lasting boost and higher profits.
Shares fell 4% in premarket trading.
Discount e-commerce sales in the US rose 69% – a large number, but the slowest growth rate since the onset of the global health crisis. Sales at the same store in the US rose 8.6%, higher than the 5.8% increase expected by a StreetAccount survey. Its subsidiary, Sam’s Club, also reported a low increase in single-digit sales in the same store, excluding fuel and tobacco.
Walmart, however, has warned that sales are expected to moderate this year. He said earnings per share will fall slightly, but will be at a higher level after another, after excluding divisions. The company’s backwinds from pandemic trends may also disappear as more Americans receive Covid-19 vaccines and spend their budget in other ways, such as going out to dinner or filling the gas tank on a shuttle back to the office.
Walmart CEO Doug McMillon said the company has stepped up investment to keep up with the significant ways retail has changed in the past year. He said it would also increase the wages of American workers, raising the average hourly wage to more than $ 15 an hour.
“This is a time to be even more aggressive because of the opportunity we see in front of us,” he said in a press release. “Strategy, team and capabilities are in place. We have momentum with customers, and our financial position is strong.”
Walmart rose to a loss of $ 2.09 billion, or 74 cents a share, from earnings of $ 4.14 billion or $ 1.45 a share a year earlier. The company said a loss in its operations in the UK and Japan reduced earnings by $ 2.66 per share, which was partially offset by a gain of 49 cents per share on equity investments.
Excluding these and other items, Walmart earned $ 1.39 per share, missing analyst estimates.
Total revenues rose 7.3% to $ 152.1 billion from $ 141.67 billion a year earlier, topping Wall Street expectations of $ 148.30 billion.
His storage club, Sam’s Club, reported that sales in the same store increased by 8.5%, excluding fuel and tobacco. The e-commerce sales of the member storage club increased by 42%.
Walmart is raising its dividend and has approved a $ 20 billion share buyback program.
This story is developing and will be updated.
Read the full press release here.