A worker wearing a protective mask is arranging shopping carts outside a Walmart store in Duarte, California, USA on Thursday, November 12, 2020.
David Swanson | Bloomberg | Getty Images
Walmart’s fourth-quarter earnings on Thursday felt less than Wall Street’s expectations, as the retailer wants to turn the strength of its e-commerce business into lasting momentum and higher profits during the pandemic.
Shares are down almost 4% in trading in the foreground market.
U.S. e-commerce sales grew by 69% – a large number but the slowest growth rate since the onset of the global health crisis. Sales of the same stores in the US grew by 8.6%, higher than the 5.8% increase expected by a StreetAccount survey. Its subsidiary, Sam’s Club, also showed low growth in single digits in the same store, excluding fuel and tobacco.
However, Walmart warns that it expects sales to be moderate this year. According to him, earnings per share will decline slightly, but this will be disregarded after the election. The company’s backlash from pandemic trends could also fade, as more Americans get Covid-19 vaccines and spend their budgets on other means, such as going out to eat or refilling the filling tank with a shuttle back to the office.
Walmart CEO Doug McMillon said the company has stepped up investments to keep up with key ways in which retail has changed over the past year. He said it would also increase the wages of American workers, which would increase the average for hourly workers to above $ 15 per hour.
“This is a time to be even more aggressive because of the opportunity we see ahead of us,” he said in a news release. “The strategy, team and capabilities are in place. We have momentum with customers and our financial position is strong.”
Walmart a year earlier had attributed a loss of $ 2.09 billion, or 74 cents per share, to earnings of $ 4.14 billion, or $ 1.45 a share. Excluding items, Walmart earns $ 1.39 per share, according to missing analysts.
Total revenue grew by 7.3% to $ 152.1 billion from $ 141.67 billion a year earlier, top Wall Street’s expectations of $ 148.30 billion.
Its membership warehouse club, Sam’s Club, reported that sales in the same store grew by 8.5%, excluding fuel and tobacco. The membership warehouse club increased by 42%.
Walmart increases its dividend and authorizes $ 20 billion in repurchase program.
This story is evolving and will be updated.
Read the full press release here.