On Thursday, November 12, 2020, a worker wearing a protective mask organizes shopping carts outside a Walmart store in Duarte, California, USA.
David Swanson | Bloomberg | Getty Images
Walmart’s fourth-quarter earnings felt lower than Wall Street expectations on Thursday as the retailer wants to turn the strength of its e-commerce business during the pandemic into a lasting boost and higher profits.
Shares fall more than 4% in premarket trading.
Discount e-commerce sales in the United States grew 69%, a large number, but the slowest growth rate since the onset of the global health crisis. In-store sales in the U.S. grew 8.6%, higher than the 5.8% increase expected by a StreetAccount survey. Its subsidiary, Sam’s Club, also recorded low single-digit single-digit sales growth, excluding fuel and tobacco.
Walmart, however, warned that it expects sales to moderate this year. He said earnings per share will decline slightly, but will be lower after excluding divestments. The company’s winds of pandemic trends may also disappear, as more Americans receive vaccines against Covid-19 and spend their budget in other ways, such as going to dinner or filling up their gas tank a commute back to the office.
Walmart CEO Doug McMillon said the company has stepped up investment to keep up with the significant ways retail has changed over the past year. He said it will also increase the wages of American workers, raising the average number of employees per hour above $ 15 per hour.
“It’s a time to be even more aggressive for the opportunity we see ahead,” he said in a press release. “Strategy, equipment and capabilities are in place. We have momentum with customers and our financial position is strong.”
Walmart earned a loss of $ 2.09 million, or 74 cents per share, from gains of $ 4.142 billion, or $ 1.45, a year earlier. The company said the loss in its British and Japanese operations reduced earnings by $ 2.66 per share, which was partially offset by a gain of 49 cents per share in equity investments.
Excluding these and other items, Walmart earned $ 1.39 per share, with no analyst estimates.
Total revenue grew 7.3% to $ 152.1 billion of $ 141.66 billion the previous year, surpassing Wall Street expectations are $ 148.30 billion.
Its member store club, Sam’s Club, reported that sales at the same store grew 8.5%, excluding fuel and tobacco. E-commerce sales of the member store club increased 42%.
Walmart is raising its dividend and has approved the $ 20 billion share repurchase program.
This story is being developed and will be updated.
Read the full press release here.