Walmart revenue pushes past half trillion dollars, annual income down almost 28%

Full-year revenue for Walmart Inc. pushed beyond the half trillion dollar mark for the first time and comp sales at Walmart U.S. continued to improve, but net income was down almost 28% and the company missed quarterly and full-year earnings expectations.

Bentonville-based Walmart on Tuesday (Feb. 20) reported fiscal 2018 – for the 12-month period ended Jan. 31 – net income of $9.862 billion, down 27.7% compared with the $13.643 billion in fiscal 2017. Full year revenue, which includes sales and memberships, totaled $500.343 billion, up 3% compared with the $485.873 billion in fiscal 2017. The full year revenue was better than the consensus estimate of $498.78 billion.

Adjusted earnings per share for the full year reached $4.42, just below the consensus estimate of $4.44.

Fourth quarter net income was $2.175 billion, down 42.1% compared with the $3.757 billion in the same quarter of 2017. Fourth quarter revenue was $136.26 billion, up 4.1% compared with the same period in 2017. Quarterly revenue was just above the consensus estimate of $134.91 billion.

Adjusted quarterly earnings per share was $1.33, below the consensus estimate of $1.37.

Walmart CEO Doug McMillon highlighted sales growth and the company’s continued investment in ecommerce and other retail innovation efforts.

“We have good momentum in the business with solid sales growth across Walmart U.S., Sam’s Club and International,” McMillon noted in the earnings report. “We’re making real progress putting our unique assets to work to serve customers in all the ways they want to shop, and I want to thank our associates for their great work this past year. We’re making decisions to position the business for success and investing to win with customers and shareholders.”

Same-store sales at Walmart U.S. in the fourth quarter were up 2.6%, better than the 1.8% gain in the fourth quarter of the previous fiscal year. Sam’s Club same-store sales were up 2.4% in the quarter, unchanged from the fourth quarter of the previous fiscal year.

The company also noted an estimated impact from the recent change in U.S. tax law.

“We are currently analyzing the accounting impact of the Tax Act, but our analysis is incomplete. As a result, we have recorded a provisional benefit of $207 million for both the fourth quarter and full year. We expect to complete our work within the allowed measurement period.”

As is often the case with Walmart, full year and fourth quarter net income was altered by several one-time charges and benefits. This year those included a loss of 67 cents per share on early retirement of debt, 28 cents per share for restructuring charges, and 9 cents for employee bonuses.

In the closely watched fourth quarter that includes holiday sales, revenue at Walmart U.S. was $86.579 billion, up 3.4% compared to the same quarter in the previous year. Revenue at Sam’s Club totaled $15.479 billion, up 3.3%. Walmart International revenue in the quarter was $33.092 billion, up 6.7%.

However, quarterly operating income in each segment was down in large part because of the aforementioned one-time charges. Operating income was down 0.9% at Walmart U.S., down 10.9% at Walmart International and down 172.6% at Sam’s Club.

FISCAL 2018 SEGMENT PERFORMANCE
Walmart U.S.
Net sales fiscal 2018: $318.477 billion
Net sales fiscal 2017: $307.833 billion

Operating income fiscal 2018: $17.869 billion
Operating income fiscal 2017: $17.745 billion

Walmart International
Net sales fiscal 2018: $118.068 billion
Net sales fiscal 2017: $116.119 billion

Operating income fiscal 2018: $5.352 billion
Operating income fiscal 2017: $5.758 billion

Sam’s Club
Net sales fiscal 2018: $59.216 billion
Net sales fiscal 2017: $57.365 billion

Operating income fiscal 2018: $982 million
Operating income fiscal 2017: $1.671 billion

Talk Business & Politics will have more later today on the Walmart earnings report.