By
Steve Muchoki
December 20th, 2023
Walmart still maintains a significant market share and investors appear pleased with the firm’s performance thus far.
Walmart Inc (NYSE: WMT), the largest retail chain in the United States has reported a strong holiday quarter revenue despite cautious spending on the part of consumers. According to the financials shared by the Arkansas-headquartered firm, its revenue for the fourth quarter came in at $164.0 billion, up 7.3%, or 7.9% in constant currency.
As of the December Holidays, inflation in the United States was still red hot and consumers were very choosy in the items they inject their spare cash on. Walmart said it positioned itself as the go-to retailer for consumers looking for cheap deals across the country.
According to the company, international net sales came in at 2.1% to $27.6 billion. The firm said this figure was negatively impacted by $900 million from currency valuation.
“We’re excited about our momentum. The team delivered a strong quarter to finish the year, and as our results in the last two quarters show, they acted quickly and aggressively to address the inventory and cost challenges we faced last year. We built momentum in the third quarter and that continues. We are well-positioned to start this fiscal year,” said Doug McMillon President and CEO of Walmart
In addition to the key growth metrics, Walmart said its GAAP Earnings Per Share (EPS) was $2.32. The firm’s adjusted EPS was pegged at $1.71. For the total fiscal year, revenue came in at $611.3 billion up 6.7% from the year-ago period.
Walmart Revenue and Inflationary Fears
According to the company’s Chief Financial Officer, John David Rainey, the prices of groceries are still relatively higher and as such are placing enormous pressure on the abilities of consumers to diversify their shopping interests.
“The consumer is still very pressured,” he said. “And if you look at economic indicators, balance sheets are running thinner and savings rates are declining relative to previous periods. And so that’s why we take a pretty cautious outlook on the rest of the year.”
Walmart still maintains a significant market share and investors appear pleased with the firm’s performance thus far. This, however, did not translate to a positive uptick in the price of the company’s shares.
The shares plunged by 3.34% to $141.55 over the past 24 hours to double down on its overall bearish outlook for the year. The shares are up by just 3% in the Year-to-Date (YTD) as against the 6% upshot for the S&P 500 Index (INDEXSP: .INX).
Despite its broader performance, Walmart gave a somewhat conservative projection for the current quarter and the fiscal year. The company said it now expects same-store sales in the United States to jump between 2 to 2.5%. The expectations for its adjusted earnings per share are now pegged within the range of $5.90 to $6.05.
The bearish run in the shares can be linked to the disappointment that trailed these conservative projections.