Walmart Shares Fall Amid Earnings Report

Walmart Shares Fall Amid Earnings Report

Walmart (NYSE:D WMT) reported positive fourth quarter earnings on Thursday. However, the company fell short of Wall Street’s adjusted earnings per share estimate. The retail giant cautioned investors that its sales could fall in the next year, while informing them about the pay rise for frontline workers, shares were down 6% on Thursday morning amid the news.

The company reported adjusted earnings of USD1.39 per share, in comparison to the estimated USD1.50 a share. Revenue totaled USD152.1 Billion, higher than analysts expected USD148.39 Billion.

Within its 2022 full-year outlook, Walmart anticipates its U.S. same-store sales, except gas, to increase by low-single digits. Furthermore, it believes consolidated net sales to rise by low single-digits.

“Assumptions in the guidance are dependent upon the duration and intensity of the COVID-19 health crisis globally, timing and effectiveness of global vaccines, the scale and duration of economic stimulus, employment trends and consumer confidence,” Walmart noted. 

Amid the pandemic, the retailer has been able to grow rapidly as people stock up on groceries, cleaning products and other essential items. Moreover, it experienced a lift during its fourth quarter as customers spent their stimulus checks. Meanwhile, the pandemic has simultaneously increased its expenses, it accumulated USD1.1 Billion in Covid-related expenses during the fourth quarter. 

According to CEO Doug McMillon, Walmart is restructuring its business to more efficiently serve its customers, build new revenue streams as well as develop various services. 

“Think of it as a flywheel that’s spinning, powered by a mutually reinforcing set of assets,” he said, while touching on how each of the businesses will support each other.

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