Walmart Swings To Profit In Q4; Results Top Estimates

Retail giant Walmart Inc. (WMT) reported Thursday a profit for the fourth quarter compared to a loss last year, driven by revenue growth and a steep drop in other losses. Both adjusted earnings per share and quarterly revenues topped analysts’ expectations. The retailer also initiated earnings and net sales growth guidance for the full-year 2023.

“We had another strong quarter to finish off a strong year. We have momentum in our business in all three segments,” said Doug McMillon, President and CEO.

Consolidated net income attributable to Walmart for the quarter was $3.56 billion or $1.28 per share, compared to a net loss of $2.09 billion or $0.74 per share in the prior-year quarter.

Excluding items, adjusted earnings for the quarter were $1.53 per share, compared to $1.39 per share in the year-ago quarter.

On average, 31 analysts polled by Thomson Reuters expected the company to report earnings of $1.50 per share for the quarter. Analysts’ estimates typically exclude special items.

Total revenue for the quarter, comprising net sales and membership and other income, edged up 0.5 percent to $152.87 billion from $152.08 billion in the same quarter last year. Revenues increased 0.6 percent to $153.0 billion in constant currency. Analysts were looking for revenues of $151.53 billion for the quarter.

Total revenue was negatively affected by $10.2 billion related to divestitures at Walmart International.

Net sales grew 0.4 percent to $151.53 billion, and Membership and other income increased 23.0 percent to $1.35 billion from last year. Consolidated U.S. comp sales, without fuel, increased 6.3 percent.

Walmart U.S. comp sales, without fuel, increased 5.6 percent and net sales rose 5.7 percent to $105.28 billion. Walmart U.S. eCommerce sales grew 1 percent.

Sam’s Club comp sales, without fuel, increased 10.4 percent and net sales also grew 16.5 percent to $19.25 billion from last year. Membership income increased 9.1 percent.

However, net sales at Walmart International declined 22.6 percent to $27.0 billion, and also decreased 22.1 percent to $27.15 billion in constant currency. eCommerce sales was led by strong growth in China and Mexico as well as Flipkart.

Looking ahead to fiscal 2023, the company now projects earnings growth in the mid single digit percentage and growth of 5 to 6 percent, excluding divestitures. It also expects consolidated net sales growth of 3 percent in constant currency and about 4 percent, excluding divestitures, with Walmart U.S. comp sales growth slightly above 3 percent, excluding fuel.

The Street is looking for earnings of $6.70 per share on a revenue growth of 3.0 percent to $588.4 billion for the year.

The board of directors of Walmart approved a two percent higher annual cash dividend for fiscal year 2023 of $2.24 per share. The first increased quarterly dividend will be payable on April 4, 2022 to shareholder on record on March 18, 2022.

The company also looking for planned share repurchases of at least $10 billion in fiscal 2023.

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