Walmart annual revenue up almost 5%, net income up 12.6%

Walmart’s fiscal-year revenue reached $713.163 billion, up 4.7% compared with the previous fiscal year, and the global retailer reported fiscal-year net income of $21.893 billion, up 12.6%. Fourth-quarter net income was down 18.5% after one-time adjustments.

The Bentonville-based retailer posted fiscal full-year and fourth-quarter numbers Thursday (Feb. 19) before the markets opened. The adjusted quarterly earnings per share was 74 cents, up 12.1% from the year-ago period and slightly better than expected. Before one-time equity adjustments of 21 cents, net income per share was 53 cents or $4.237 billion, down 18.5% year over year. Revenue, which includes sales and membership income, totaled $190.65 billion in the quarter, up 4.7%.

The retail giant also reported e-commerce sales growth of 24% globally and operating income growth of 10.8%, twice the rate of sales growth. This is the third consecutive year that Walmart U.S. has grown profits ahead of sales. Net income growth was fueled in part by a 15.1% gains in global membership revenue and global advertising revenue gains of 37% in the quarter.

“The pace of change in retail is accelerating. It’s exciting,” Walmart CEO John Furner noted in the report. “Our financial results show that we are not only embracing this change, but we’re also leading it. For our customers and members, the future is fast, convenient and personalized.”

Furner said during an earnings call that the U.S. consumer continues to spend, but pressures are notable.

“We see the customer is choiceful in their spending again this quarter,” he said. “The majority of our market share gains came from households earning more than $100,000 annually. For households earning below $50,000, we continue to see that wallets are stretched and in some cases people are managing spending paycheck to paycheck.”

For the ongoing fiscal year that began Feb. 1, Walmart expects revenue to increase between 3.5% to 4.5%, with operating income growth expected at twice that rate. Earnings per share are expected to range between $2.75 and $2.85.

Walmart Chief Financial Officer John David Rainey said during the call that Walmart chose to be guarded with the early guidance.

“We see momentum in our business, and each year has gotten better than the last,” Rainey said. “We expect that again this year.”

WALMART U.S.
Walmart’s U.S. segment had fourth-quarter revenue of $129.2 billion, up 4.6%. Same-store sales growth was 4.6%, with e-commerce contributing all of that total. The company said transactions were up 2.6% and the average ticket grew by 2%. Operating income totaled $7 billion, up 6.6% from a year ago.

For the year, Walmart U.S. reported total revenue of $483 billion, up 4.4%. Comp sales increased 4.6% for the year.

Walmart said sales momentum was led by digital transactions and broad-based share gains across categories. Inventory was up 2.9% at the end of the quarter, and the company said inflation increased about 1% from a year ago.

E-commerce sales increased 27% from a year ago. Walmart Connect, the retailer’s advertising business, posted a revenue increase of 41% from a year ago.

Revenue at Marketplace, the retailer’s platform for third-party sellers, increased 20% during the quarter, and 52% of sellers used fulfillment services offered by Walmart. The retailer said it is providing faster delivery speeds on an assortment of 8.6 billion items, the same or next day. Last year, expedited deliveries under three hours resented 35% of store fulfilled orders.

The company also said it expected the new fair pharmacy pricing legislation that became effective Jan. 1 to ding sales between 1% and 2% this year. Roughy 20% of the segment’s revenue comes from pharmacy, according to analysts.

David Guggina, the newly named CEO of Walmart U.S., said during the call that the quarter was fantastic.

“It is clear to me that we are operating from a position of strength, and the opportunity ahead of us is significant,” he said. “We’re investing with confidence in automation, new stores, remodels, our marketplace, membership, advertising and all of this will strengthen the customer experience and drive productivity, improving our economics over time.”

SAM’S CLUB, INTERNATIONAL
Sam’s Club posted net sales of $23.8 billion, up 2.9% year over year. Comp sales grew 4% with e-commerce contributing 3.8% of that total. E-commerce sales were up 23%, and membership fee revenue increased 6.1% with increased members among the younger consumers.

For the year, Sam’s Club reported sales of $93 billion, up 3.1%. Excluding fuel, the revenue totaled $83.7 billion, up 5% from the previous year. Comp sales for the year grew 5.1%, slower than the 5.9% reported in the previous year.

Walmart’s International business posted fourth-quarter revenue of $35.9 billion, up 11.5%. Sales growth was led by China, Walmex and Flipkart in India with strong momentum from stores and online. Walmex reported sales of $14.2 billion, up 4.5% year over year. Comparable sales increase 2.8%, but online sales grew 14%. In China, net sales totaled $6.1 billion, up 19.3%, and comparable sales grew 10.7%. The company did not report any specific financials for Flipkart.

Walmart raised its annual cash dividend for this year to 99 cents, up from 94 cents. The board of directors also approved a new $30 billion share buyback authorization. In the recent quarter, Walmart said it bought back $1.1 billion in shares and paid $1.9 billion in dividends to shareholders.

Walmart shares (NASDAQ: WMT) were trading at $126.19, down 43 cents near midday. Over the past 52 week, the share price has traded between $79.81 and $134.69. Over the past year, Walmart’s share value is still up 21.28%.