Walmart Q4 beat expectations during holiday shopping

Walmart Q4 beat expectations during holiday shopping

NEW YORK (AP) — Walmart on Tuesday reported strong holiday season sales as budget-conscious shoppers flocked to its stores looking for better deals.

The report was a good showing for the company considering that consumers overall reduced their spending during the last November-December shopping period. Although sales at stores and restaurants rose last month, it appears that shoppers are still spending despite higher prices and several interest rate hikes by the Federal Reserve in an effort to curb the problem.

The nation’s largest retailer also posted full-year sales of $611.3 billion, up 6.7% from the prior year. But it gave cautious guidance for next fiscal year, saying it expects sales to grow 2.5% to 3% and U.S. sales to grow 2% to 2.5%. And it forecast adjusted earnings per share of $5.90 to $6.05, excluding fuel. Analysts polled by FactSet forecast $6.52 per share on average. Shares fell 4% in premarket trading.

Walmart, like Amazon and other retailers, saw a boost during the pandemic as homebound shoppers spent more on discretionary items like decor to beautify their homes. But consumers are now focusing more on essentials like groceries, which has left the company with a glut of excess inventory and profit from higher-margin discretionary merchandise.

The big-box retailer noted in recent quarters that shoppers are looking at spending and trading up to private brands in categories like baking goods to save costs. High-income shoppers are also flocking to grocers, and the company said it’s looking to retain them with fresh food and apparel offerings.

The company reported revenue of $164 billion for the quarter ended Jan. 27, up 7.3% from the same period last year. Profit reached $6.28 billion, up from $3.56 billion last year. Meanwhile, earnings per share adjusted for one-time costs and benefits were $1.71, beating Wall Street expectations of $1.52.

Overall, holiday sales in November and December were a weaker-than-expected 5.3%, slowing from 13.5% in 2021, according to the National Retail Federation. Major retailers, including Walmart and Target, began offering discounts in October to help consumers spread their spending. And Black Friday doorbusters, which usually draw large crowds, were also exchanged for weeklong discount events.

Comparable sales – those operating in established stores and online over the last 12 months – rose 8.3%, up slightly from 8.2% in the previous quarter. Online sales increased 17%.

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