Forget the dismal U.S. retail sales report from last week–Walmart Inc.’s fourth quarter report on Tuesday indicated that it had the best holiday quarter in years.
In a Nutshell: Walmart’s initiatives during the year helped it garner its strongest quarterly comps growth in nine years, as well a 43 percent gain in e-commerce sales for the holiday period. The discounter during the year also added to its fashion portfolio through the opening of new “stores” on its site and via acquisitions.
Sales: Walmart said total sales for the quarter ended Jan. 25 rose 1.9 percent to $138.8 billion. Walmart U.S. stores posted a 4.6 percent increase in net sales to $90.5 billion, with comparable sales up 4.2 percent. The company also noted that comps “on a two-year stack of 6.8 percent is the strongest growth in 9 years.” It also said U.S. e-commerce continued to benefit from the expansion of grocery pick-up and delivery and a broader assortment on Walmart.com.
For the year, total revenue rose 2.8 percent to $514.4 billion. In the U.S., comps were up 3.6 percent, while e-commerce sales rose 40 percent.
Among the initiatives during the year were the addition of 1,000 grocery pick-up locations; the launch of Spark Delivery, a test of a new last-mile grocery delivery service; new in-store innovations that include autonomous shelf-scanning robots and the remodeling of 500 U.S. stores. The company during the year also added Checkout with Me in all U.S. stores, a service that allows customers to checkout from anywhere, and its new endless aisle feature that allows customers to order and pay for online items while inside a store.
During the year, the company also redesigned its Walmart.com and Jet.com sites. It also added more fashion to its site, launching a Lord & Taylor shop and a Nike, Apple and Fanatics stores on Walmart.com. The company also completed two fashion acquisitions last year, specialty intimates retailer Bare Necessities and digitally native plus-size fashion brand Eloquii.
Earnings: For the fourth quarter, adjusted earnings per share was $1.41. Those numbers had the company besting Wall Street’s consensus estimates of adjusted EPS of $1.33, on revenues of $138.65 billion.
The discounter reiterated its fiscal 2020 full-year guidance that was provided on Oct. 16, which called for a consolidated net sales growth of at least 3 percent, comps sales growth at Walmart U.S. stores of 2.5 percent to 3 percent. The retailer also projected its U.S. e-commerce sales to grow 35 percent. For the year, Walmart said it expect to open fewer than 10 stores, while its International division expects to open slightly more than 300 new stores primarily in Walmex and China.
The company operates over 11,300 stores globally under 58 banners in 27 countries and e-commerce sites.
CEO’s Take: Doug McMillon, Walmart’s president and chief executive officer, said, “Progress on initiatives to accelerate growth, long with a favorable economic environment, helped us deliver strong comp sales and gain market share. We’re excited about the work we’re doing to reach customers in a more digitally-connected way.”
McMillon emphasized the retailer’s commitment to its customers, noting, “[W]e’ll be there when, where and how they want to shop and deliver new, convenient experiences that are uniquely Walmart.”