Retailer will raise average wage to more than $15 per hour
BENTONVILLE, Ark. — Walmart reported record sales for its fourth quarter and year ended January 31. Revenues totaled $152.1 billion for the fourth quarter (an increase of 7.3%) and $559.2 billion (an increase 6.7%) for the year.
The retailer also said it was stepping up its capital investments and will raise its average associate pay to more than $15 per hour.
Walmart U.S. comp sales increased 8.6%, and Walmart U.S. eCommerce sales increased 69%. Sam’s Club comp sales increased 10.8% and its eCommerce sales grew 42%, despite a hit of about 410 basis points caused by reduced tobacco sales. Membership income at Sam’s increased 12.9%, the strongest growth in six years.
“We completed a strong year and a strong Q4 thanks to our amazing associates,” said Walmart president and CEO Doug McMillon. “They stepped up to serve our customers and members exceptionally well during a busy holiday period in the midst of a pandemic. Change in retail accelerated in 2020. The capabilities we’ve built in previous years put us ahead, and we’re going to stay ahead. Our business is strong, and we’re making it even stronger with targeted investments to accelerate growth, including raises for 425,000 associates in frontline roles driving the customer experience.
“This is a time to be even more aggressive because of the opportunity we see in front of us. The strategy, team and capabilities are in place. We have momentum with customers, and our financial position is strong.”
Walmart said it is investing in automation to fuel future sales and earnings growth. Capital investments in the current fiscal year are expected to be nearly $14 billion as the retailer strives to build supply chain capacity and automation to stay ahead of demand, improve the customer experience and increase productivity.
Net sales, operating income and EPS are expected to decline in this fiscal year, primarily due to the impact of anticipated divestitures. Excluding the effect of divestitures, net sales are expected to grow low single-digits with operating income and EPS expected to be flat to up slightly. The company increased its dividend for the 48th consecutive year and approved a new $20 billion share repurchase program.
For the just-completed fiscal year, Walmart reported:
- Total revenue was $559.2 billion, an increase of $35.2 billion, or 6.7%. Excluding currency2 , total revenue was $564.2 billion, an increase of $40.2 billion, or 7.7%.
- Walmart U.S. comp sales1 increased 8.6%.
- Walmart U.S. eCommerce sales grew 79%. The contribution profit continued to improve.
- Sam’s Club comp sales increased 11.8%. Reduced tobacco sales negatively affected comp sales by approximately 400 basis points. Membership income increased 9.4%.
- Walmart International net sales increased 1.0%, or 5.2% in constant currency with strength in Mexico, Canada and Flipkart.
- The company generated $36.1 billion in operating cash flow and returned $8.7 billion to shareholders through dividends and share repurchases.
“Our associates responded unbelievably to serve customers in one of the most challenging times we’ve faced,” said Walmart chief financial officer Brett Biggs. “We have tremendous momentum having just completed a year with record sales and operating cash flow. We accomplished this while accelerating our long-term strategy of transforming Walmart into a dynamic omnichannel business. It’s now time to accelerate even more.”