NEW YORK (AP) — Walmart on Tuesday reported strong sales during the holiday season as budget-conscious consumers looking for better deals flocked to its stores.
The report was a good showing for the company, considering consumers had overall cut back on their spending during the traditional November-December shopping period. Though sales rebounded at stores and restaurants last month, showing shoppers are still spending despite higher prices and several interest rate hikes by the Federal Reserve in an effort to curb the problem.
The nation’s largest retailer also delivered full-year sales of $611.3 billion, up 6.7% compared to the prior year. But it gave cautious guidance for the next fiscal year, saying it expects sales to increase between 2.5% to 3% and U.S. sales to jump 2% to 2.5%. And it forecast adjusted earnings per share ranging from $5.90 to $6.05, excluding fuel. Analysts surveyed by FactSet forecast $6.52 per share, on average. Shares fell more 4% in premarket trading.
Walmart, like Amazon and other retailers, saw a boost during the pandemic as homebound shoppers spent more on discretionary items like décor to beautify their houses. But consumers are now focusing more on necessities like groceries, which has left the company with a glut of excess inventory and dented profits it could make from high-margin discretionary merchandise.
The big-box retailer has noted in recent quarters that shoppers have been watching how they spend and trading down to private brands in categories such as baking goods in order to save costs. High-income shoppers looking for deals on groceries have also been flocking to its stores, and the company has said its looking to retain them by offering fresh food and clothing assortments.
The company reported revenue of $164 billion in the quarter that ended on January 27, up 7.3% compared to the same period last year. Profits reached $6.28 billion, up from $3.56 billion last year. Meanwhile, per-share earnings adjusted for one-time costs and benefits were $1.71 beating Wall Street expectations of $1.52.
Overall, holiday sales in November and December rose a weaker-than-expected 5.3%, a slowdown from 13.5% in 2021, according to the National Retail Federation. Major retailers, including Walmart and Target, began offering discounts in October to help consumers spread out their spending. And Black Friday doorbusters, which typically drew massive crowds, were also exchanged for weeks-long discount events.
Comparable sales — those from established stores and online operating over the past 12 months — rose 8.3%, slightly higher than 8.2% from the previous quarter. Online sales rose 17%.