retail

Walmart Sets Sales Record, Ad Revenue Tops $2B

Walmart’s fourth-quarter results are in, beating expectations. And its record sales offer plenty of proof that the retailer is outsmarting supply-chain challenges, keeping its “Everyday Low Prices” positioning even as inflation worries consumers.

It also reports that Walmart Connect, its fledgling ad business, hit $2.1 billion for the fiscal year, with active advertisers growing by more than 130% year over year.

Walmart’s financial results aren’t just eagerly awaited by its investors. Much of the financial world keeps a close eye on its earnings reports, believing its balance sheets often say as much about the American consumer as they do about the retailer’s management.

The verdict? Shoppers are in good shape, with the Bentonville, Arkansas-based retailer reporting solid results -- and record sales -- for its fiscal fourth quarter.

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Total revenue topped $152.1 billion, a rise of 7.3%, including the impact of currency changes. Consolidated operating income improved by 3.1%, reaching $5.5 billion, while adjusted operating income slipped 3.2%, due in part to expenses related to COVID-19.

In the U.S., comparable-store sales rose 8.6%. Domestic purchases in Walmart’s ecommerce division jumped a hefty 69%, pushing delivery and store pickups to record levels.

“The U.S. division remains the star of the show,” writes Neil Saunders, managing director of GlobalData, in his note reacting to the results, with total annual sales up 5.7% from the prior year. “On a two-year basis, U.S. sales have expanded by 14% or by $13 billion. For a business as dominant and with as much consumer penetration as Walmart, this is an exceptional outcome that underlines the fact Walmart has got a lot of things right during the past two, highly disrupted years.”

The company says gains reflect strength in most categories, including food and anything linked to customer leisure and comfort, such as home, electronics, sporting goods, toys and outdoor living.

Results also strengthened at the company Sam’s Club division, where comparable sales advanced 10.8%, and ecommerce sales grew 42%. While reduced tobacco sales negatively affected results, membership income grew by 12.9%, which it says is the best increase in six years.

And for the year ahead, Walmart reiterated its outlook, forecasting sales gains in the low single digits

It also announced plans to spend $14 billion to better its supply chain capacity and improve automation and investments in customer experience and wage hikes for its hourly employees.

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