Walmart tops Street as sales, earnings rise on e-commerce growth, holiday traffic

Walmart Inc. ended the year on a strong note amid soaring online sales and growth in store and digital traffic.

The nation’s largest retailer continued to make inroads outside its core demographic as it noted share gains in grocery and general merchandise, primarily among higher-income households. 

Walmart also announced it will acquire smart TV maker/streaming platform provider Vizio in a deal worth $2.3 billion as it continues to increase fast-growing advertising and media business, Walmart Connect.

In its earning release, Walmart said it raised its annual dividend rate by approximately 9%, to $2.49 a share from the $2.28 per share paid for the last fiscal year. The retailer said the increase is its biggest dividend boost in more than 10 years and its 51st consecutive year of dividend increases.

Walmart reported net income of $5.49 billion, or $2.03 a share, for the quarter ended Jan. 31, from $6.28 billion, or $2.32 a share, in the year-ago period.  Adjusted earnings were $1.80 per share, easily topping analysts estimates of $1.64 per share.

Total revenue rose 5.7% to $173.39 billion, above estimates of $170.85 billion. 

Walmart U.S. same-store sales increased 4%, also more than expected. Sales were led by grocery and health & wellness. General merchandise sales declined "modestly" the company said.

The number of transactions increased 4.3%, but the average ticket inched down 0.3%.  Same-store sales at Sam’s Club rose 3.1% (excluding fuel). Same-store sales at Walmart International rose 13%.

Global e-commerce sales soared 23% during the quarter. In the U.S., e-commerce sales rose 17%, led by strength in pickup and delivery.

“Our team delivered a great quarter, finishing off a strong year,” stated Walmart president and CEO Doug McMillion. “We crossed $100 billion in e-commerce sales and drove share gains as our customer experience metrics improved, even during our highest volume days leading up to the holidays." 

Walmart has bucked the recent industry trend of cost cutting. In January, it said it would open or expand more than 150 U.S. stores to its larger format during the next five years.  Also in January, the company announced an increase in its its store managers’ pay.

“We’re investing in our people and global platform to position us to drive profitable growth in the years ahead,” stated Walmart executive VP and CFO John David Rainey in the company’s earnings release.

Walmart said it expects first-quarter adjusted earnings of $1.48 to $1.56 per share, less than analysts were expecting. Sales are expected to rise 4% to 5%.

For the full fiscal year, Walmart expects adjusted earnings of $6.70 to $7.12 per share. Consolidated net sales are expected to climb 3% to 4%.