A worker wearing a protective mask arranges shopping carts outside a Walmart store in Duarte, California, U.S., on Thursday, Nov. 12, 2020.
David Swanson | Bloomberg | Getty Images
Walmart’s fourth-quarter earnings felt short of Wall Street’s expectations on Thursday, as the retailer aims to turn the strength of its e-commerce business during the pandemic into lasting momentum and higher profits.
The discounter’s e-commerce sales in the U.S. grew by 69% — a large number, but the slowest growth rate since the start of the global health crisis. Same-store sales in the U.S. grew by 8.6%, higher than the increase of 5.8% expected by a StreetAccount survey. Its subsidiary, Sam’s Club, also reported low single-digit same-store sales growth, excluding fuel and tobacco.
Walmart, however, cautioned that it expects sales to moderate this year. It said earnings per share will decline slightly, but be flat to higher after excluding divestitures. The company’s tailwinds from pandemic trends may also fade, as more Americans get Covid-19 vaccines and spend their budget in other ways, such as going out to dinner or filling up the gas tank on a commute back to the office.
Walmart CEO Doug McMillon said that the company has stepped up investments to keep up with the significant ways that retail has changed over the past year. He said it will also boost the wage of U.S. workers, raising the average for hourly employees to above $15 per hour.
“This is a time to be even more aggressive because of the opportunity we see in front 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 swung to a loss of $2.09 billion, or 74 cents per share, from earnings of $4.14 billion, or $1.45 share, a year earlier. Excluding items, Walmart earned $1.39 per share, missing analysts estimates.
Total revenue grew by 7.3% to $152.1 billion from $141.67 billion a year earlier, topping Wall Street’s expectations of $148.30 billion.
Its membership warehouse club, Sam’s Club, reported same-store sales grew by 8.5% excluding fuel and tobacco. The membership warehouse club’s e-commerce sales jumped by 42%.
This story is developing and will be updated.