Walmart on Thursday said holiday-quarter revenue rose about 4% and e-commerce sales shot up 20% in the U.S., as growth in store pickup and home deliveries and gains with upper-income shoppers boosted results.
In the fiscal year ahead, the discounter said it expects net sales to grow 3% to 4% and adjusted operating income to grow between 3.5% to 5.5% on a constant currency basis. The company said that includes a 150 basis point, or 1.5 percentage point, headwind from acquiring smart TV company Vizio and following a leap year in 2024.
In an interview with CNBC, Chief Financial Officer John David Rainey described consumer spending patterns as “steady” and said “there’s not any sharp changes that we’ve seen.”
Yet he acknowledged “there’s far from certainty in the geopolitical landscape.”
About two-thirds of what Walmart sells is made, grown or assembled in the U.S. Yet if tariffs on imports from Mexico and Canada take effect, he said Walmart is “not going to be completely immune.”
“We’ve lived in a tariff environment for the last seven or eight years, and we’ll do what we know how to do,” he said. “We’ll work with suppliers. We’ll lean into our private brand. We’ll shift supply where necessary to try to take advantage of lower costs that we can then pass on to consumers.”
Since Walmart is not sure if the tariffs will take effect next month, the company did not factor them into its guidance, Rainey said.
Here is what the big-box retailer reported for the fiscal fourth quarter compared with Wall Street’s estimates, according to a survey of analysts by LSEG:
- Earnings per share: 66 cents adjusted vs 64 cents expected
- Revenue: $180.55 billion vs. $180.01 billion expected
In the three-month period that ended Jan. 31, Walmart’s net income fell to $5.25 billion, or 65 cents per share, compared with $5.49 billion or 68 cents per share in the year-ago period. Revenue rose from $173.39 billion in the year-ago quarter. The company’s adjusted earnings per share figure excluded one-time items, including opioid-related legal costs and gains and losses on equity and other investments.
Comparable sales, an industry metric also known as same-store sales, increased 4.6% for Walmart’s U.S. business and 6.8% for Sam’s Club, excluding fuel.
Walmart’s e-commerce sales in the U.S. soared 20% compared with the year-ago period. That marked the 11th straight quarter of double-digit gains. Global e-commerce sales rose 16%.
In the Walmart U.S. segment, customers’ store visits and purchases climbed, as transactions rose 2.8% and average ticket increased 1.8% year over year.
As Walmart is the top grocer in the U.S., investors often view it as a barometer of consumer health. Investors have tried to parse whether softer U.S. retail sales in January were a blip or warning sign. Wall Street also is trying to understand the potential impact of policy decisions, such as tariffs, on consumer spending.
Walmart’s e-commerce growth and newer initiatives worked in its favor in the fourth quarter. Its advertising business and third-party marketplace are small compared to Amazon’s, but have posted gains and driven higher margins than Walmart’s retail business.
Rainey pointed to double-digit gains in the fourth quarter in global advertising, membership income and Walmart’s fulfillment services segment, which packs and ships orders to third-party sellers.
“These are all higher margin, faster growing parts of our business where the math is just suggesting that our margins are going up over time,” he said. “And frankly, I don’t see any end to this.”
Walmart also hiked its dividend by 13% to 94 cents per share, the largest increase in over a decade.
As of Wednesday’s close, shares of Walmart are up about 83% over the past year. Shares closed on Wednesday at $104.00, up about 15% so far this year and outpacing the approximately 4% gains of the S&P 500 during the same period.
