Walmart Reports Strong Q4 Data, Beats Holiday Expectations

On Tuesday, Walmart reported strong Q4 data as it beat the holiday earnings estimates amid budget-conscious consumers continuing to spend. Its stock price improved by 0.61% to $147.33 per share on February 21. Also, it is expected to rise further by 0.02% to $147.36 apiece in the next session.

The discounter’s earnings per share went up to $1.71, surpassing the analysts’ $1.52 forecast. Additionally, the reading is better than the previous $1.50 data. Moreover, the revenue of Walmart jumped to $164.00 billion, higher than the anticipated $159.77 record. Therefore, it exceeded the former $152.80 billion figures. It marks a 7.30% year-over-year progress.

According to analysts, the company hopes for same-store sales between 2.00% and 2.50%, excluding fuel, in the upcoming fiscal year. However, the estimates are below the experts’ consensus of 3.00% growth. Furthermore, they are looking forward to adjusted earnings per share ranging from $5.90 to $6.05, excluding fuel.

Besides, Walmart reported a net income of $6.28 billion, an improvement from the $3.56 billion from last year. In addition, e-commerce sales heightened by 17.00% YoY.

During the holiday quarter, its share gains came from lower and middle-income consumers. A huge volume of unsold goods piled up in back rooms ended up on the clearance racks.

Meanwhile, Walmart Chief Executive Officer Doug McMillon said customers still spend money while making choices. As a result, it is not clear what the other half of the year will look like for the major retailer.

Consumer Slowdown Anticipated by Walmart

For Walmart, customers are getting more challenging to win over. This means shoppers will likely only buy necessities such as groceries instead of discretionary items.

According to analysts, the firm considered challenging factors in its full-year forecast. This includes the Federal Reserve’s higher interest rates and consumers’ lower savings rates.

Recently, Walmart announced increasing its minimum wage from $12.00 to $14.00 per hour. This move attempts to make their store workers stay in a tight labor market for the lower-wage industries.

Likewise, the raise is projected to affect its profit, compressing margins at the same time while its core lower-income consumers are still hit by inflation.