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Walmart earns $6.3B in 4th quarter

Giant retailer expects growth to slow going forward by Serenah McKay | February 22, 2023 at 9:02 a.m.
This undated file photo shows Walmart's sign in front of its Bentonville headquarters.

Walmart Inc.'s fourth-quarter net income nearly doubled over last year's despite inflation and a surplus of inventory, but the retailer also predicted Tuesday that it will see slower growth in the current quarter and fiscal year.

The Bentonville-based retailer posted a profit of $6.3 billion, or $2.32 per share, for the quarter that ended Jan. 31, compared to $3.5 billion, or $1.28 per share, in the same period a year ago, in a report released before the stock market opened. Per-share earnings beat the average estimate of $1.51 from 32 analysts surveyed by Thomson Reuters.

Revenue climbed to $164 billion, compared to $152.9 billion a year ago.

Doug McMillon, Walmart's president and chief executive officer, said in the earnings presentation that the company "acted quickly and aggressively to address the inventory and cost challenges" of the past year.

"We built momentum in the third quarter and that continues," McMillon said. "We are well-positioned to start this fiscal year."

As a company known for its low prices, he said, Walmart benefited from higher-income shoppers looking to save money. McMillon said he believes they'll continue to shop at Walmart even if inflation ebbs because of the services it offers like curbside pickup and delivery.

Walmart formulated its guidance for the first quarter and rest of this fiscal year with a "cautious outlook," McMillon said.

For the first quarter, the company sees net sales growing about 4.5% to 5%, with adjusted earnings per share of $1.25 to $1.30.

For fiscal 2024, Walmart expects net sales to increase 2.5% to 3%, with adjusted earnings per share of $5.90 to $6.05.

"Walmart has a history of under-promising and over-delivering, and its forecast for the rest of the year aligns with that philosophy," said Carol Spieckerman, a retail consultant and president of Spieckerman Retail. "That isn't to say that real challenges don't exist.

"Walmart will be better positioned than most to weather any storms, particularly as it diversifies into non-product ventures in health care, entertainment and retail media," she said.

Spieckerman also said that Walmart's decision to increase employee pay may eat into short-term profits, "but will pay off for the long term."

Spieckerman said a 7.3% year-over-year gain in the fourth quarter "is nothing to sneeze at given the headwinds all retailers were facing."

But shoppers are still buying lots of groceries while showing caution with discretionary spending on higher-margin categories, she said.

"The imbalance can be attributed to budgetary constraints, yet Walmart has arguably made grocery shopping so convenient that cross-category conversion has become more of a struggle," she said.

Walmart's working to correct the imbalance by remodeling stores to showcase apparel, pet, beauty and other non-grocery categories, Spieckerman said, and by introducing better brands that should gain traction over time.

"These moves should also help Walmart hold onto higher-income shoppers and give them a reason to cross the aisle," Spieckerman said.

Brian Yarbrough, a retail analyst with financial services firm Edward Jones, said that historically, "those higher-income consumers who trade down into Walmart during tougher economic times tend to trade right back out when things get better."

It could be different this time, Yarbrough acknowledged. Even before the pandemic, he said, some higher-income customers were interested in services such as curbside pickup, he said.

But "most higher-end people go to the grocery store because it's convenient, they're in and out quickly, they know where everything is," Yarbrough said. "When you go to one of these supercenters, it's not the most efficient process."

"I'm not convinced that high-income consumers will stay," especially as inflation slows, "but that remains to be seen," Yarbrough said.

Walmart's U.S. unit, by far the company's largest, posted net sales of $113.7 billion.

Sales at stores open at least a year, also called same-store sales, rose 8.3% as the company continued to gain market share in grocery. Same-store sales are considered a key indicator of a retailer's health.

The unit's e-commerce sales grew 17%.

Walmart International recorded net sales of $28.5 billion in constant currency, led by China, Mexico and Canada.

At Sam's Club, Walmart's warehouse club division, net sales including fuel rose 11.3% to $21.4 billion. Same-store sales, excluding fuel, increased 12.2%.

Membership income rose 7.1%, the company said, with its member count at an all-time high.

For the full fiscal year, Walmart posted earnings of $4.27 per share. The retailer's total revenue climbed 6.7% to $611.3 billion.

Its U.S. same-store sales increased 6.6%, with e-commerce sales up 12%.

Sam's Club's same-store sales rose 10.5% with a membership increase of 8.6%.

In addition to its retail divisions, Walmart's global advertising business grew more than 30% for the year to $2.7 billion, led by Walmart Connect in the U.S. and Flipkart Ads in India.

Walmart's shares closed Tuesday at $147.33, up 89 cents, or 0.61%, on the New York Stock Exchange. The stock has traded between $117.27 and $160.77 in the past year.

A replay and transcript of Tuesday's presentation and conference call with investors are available at Walmart's corporate website by going to and selecting the Fourth Quarter Earnings Release event.

Print Headline: Walmart earns $6.3B in 4th quarter


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