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Walmart concludes strong year with stellar quarter

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BENTONVILLE, Ark. — Wal­mart wrapped up its 2022 fiscal year on a resoundingly strong note, beating Wall Street’s expectations for fourth quarter adjusted earnings, revenues and same-store sales. The flagship Walmart U.S. division, moreover, topped $100 billion in quarterly sales for the first time.

“We had another strong quarter to finish off a strong year,” said president and chief executive officer Doug McMillon in a statement. “We have momentum in our business in all three segments. We’re being aggressive with our plans and executing on the strategy. It’s exciting to see how the teams are simultaneously navigating today’s challenges and reshaping our business.”

Consolidated net income for the fiscal year ended January 31 gained 1.2% to $13.67 billion, or $4.87 per diluted share. Adjusted full-year earnings, which exclude $1.59 in unusual items, totaled $6.46 per share.

The bottom line for the final quarter swung to a $3.56 billion profit from a year-ago loss of $2.09 billion. On a per share basis, GAAP or reported fourth quarter earnings were $1.28 per share. Factoring out 25 cents per share in special items including unrealized and realized losses on equity investments and restructuring charges, adjusted earnings came in at $1.53 per share, surpassing the average estimate of $1.50 among analysts polled by The Street.

Turning to the top line, full-year consolidated net sales advanced 2.3% to $555.23 billion, while membership and other income vaulted 27.4% to $3.92 billion. Total revenues improved 2.4% to $572.75 billion.

Total revenues for the fourth quarter edged up 0.5% to $152.87 billion, exceeding analysts’ average estimate of $151.6 billion. Net sales for the period rose 0.4% to $151.53 billion while membership and other income leapt 23% to $1.35 billion.

During a conference call with analysts, McMillon provided detail about the retailer’s performance during the holidays.

“We continued to gain market share in food and consumables in the U.S., and comp transactions were positive,” he said. “Consumer demand during the quarter was strong, and the team overcame a number of challenges in the U.S. and around the world to deliver these strong results.

“Going into the quarter we were confident that we had the people, the products and the prices to deliver, and we did. Our inventory position improved and we delivered high sell-throughs in seasonal categories across markets.… Our merchants are doing a nice job of navigating the pressure from cost-of-goods inflation.”

Turning to Walmart’s operating segments, both Walmart U.S. and Sam’s Club turned in impressive performances, while results for the International division reflected significant divestments.

Full-year operating income for Walmart U.S. gained 12.9% to $21.6 billion on a 6.3% rise in sales to $393.2 billion that was driven by a 6.4% increase in comparable sales. Operating profit for the final three months inched up 0.3% to $5.2 billion as net sales advanced 5.7% to $105.3 billion, reflecting a 5.6% rise in comp sales excluding fuel. Both customer traffic and average transaction showed solid growth, as transactions increased 3.1% and the average ticket expanded 2.4%.

Walmart U.S. e-commerce sales grew 11% over the course of the year but edged up just 1% in the fourth quarter. On a two-year stack, however, e-commerce surged 70% during the final quarters and 90% over the 2020 and 2021 periods.

At Sam’s Club, meanwhile, operating income for the year leapt 18.5% to $2.3 billion on a 15.1% hike in net sales to $73.6 billion. Fourth quarter operating profit skyrocketed 41.1% to $500 million while net sales escalated 16.5% to $19.2 billion. The impressive top-line growth was propelled by a 10.4% jump in comparable sales (excluding fuel) that reflected a 7% surge in customer traffic and a 3.2% increase in the average transaction.

As mentioned above, divestitures in the International division resulted in full-year net sales tumbling 16.8% (20.5% on a constant currency basis) to $101 billion, although operating profit still advanced 2.7% to $3.8 billion. During the fourth quarter, net sales plummeted 22.6% to $27 billion while adjusted operating income edged downward 0.6% to $1 billion.

Walmart’s non-retail businesses continued to gain traction as well in 2021. The company’s U.S. marketplace gained about 20,000 new sellers, and its global advertising business achieved net sales of $1.6 billion, as active advertisers using Walmart Connect in the U.S. expanded 136%.


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