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Walmart Reports 'Softer Than Expected' Q4 Sales In US Stores

Walmart store exterior 1 725 x 500.jpg

Walmart has reported on fourth-quarter trading, covering the three months ended January 31st, 2020.

Fourth-quarter highlights:

- Total revenue was $141.7 billion, an increase of $2.9 billion, or 2.1%.

- Walmart U.S. comp sales1 increased on a two-year stacked basis by 6.0% with continued strength in food and consumables.

- Walmart U.S. eCommerce had strong growth in grocery pickup and delivery, and walmart.com had its highest quarterly growth rate of the year.

- Sam’s Club comp sales1 increased 0.8%, and eCommerce sales grew 33%. Reduced tobacco sales negatively affected comp sales by approximately 300 basis points.

- Net sales at Walmart International were $33.0 billion, an increase of 2.3%. Disruption in Chile negatively affected operating income by approximately $110 million.

- Adjusted EPS2 excludes the effects of four items:
• An unrealized gain of $0.26, net of tax, on the company’s equity investment in JD.com
• A charge of $0.15, net of tax, related to business restructurings
• A tax benefit of $0.11 related to a reduction in corporate income tax rates in India
• A charge of $0.15 related to certain income tax matters

Fiscal 2020 highlights:

- Total revenue was $524.0 billion, an increase of $9.6 billion, or 1.9%. Excluding currency
2, total revenue was $528.1 billion, an increase of $13.7 billion, or 2.7%.

- Walmart U.S. comp sales1 increased 2.8% and 6.4% on a two-year stacked basis.
Walmart U.S. eCommerce sales grew 37%. Net Promoter Score and the Customer Value Index improved.

- Sam’s Club comp sales1 increased 0.7%. Reduced tobacco sales negatively affected comp sales by approximately 310 basis points. Membership trends were strong.

- International net sales increased 2.8% in constant currency 2 with strength in Mexico, China and India. 

- The company generated $25.3 billion in operating cash flow and returned $11.8 billion to shareholders through dividends and share repurchases.

Doug McMillon, President and CEO, Walmart, said:

“We thank our associates for another good year. In Q4, we saw strong performance in the U.S. with eCommerce and Sam’s Club plus strength in Mexico, India and China. We started and finished the quarter with momentum, while sales leading up to Christmas in our U.S. stores were a little softer than expected. The new year has started off well, and we look forward to another strong year. We remain focused on providing our customers with the best omnichannel experience from any retailer. ”  

Brett Biggs, Chief Financial Officer of Walmart Inc., said:

“The fourth quarter started and ended strong with solid sales growth through Cyber Monday and in January. In the few weeks before Christmas, we experienced some softness in a few general merchandise categories in our U.S. stores. However, Walmart U.S. grocery sales and eCommerce sales were strong throughout the quarter. Sam’s Club performed well, including solid results in eCommerce. We experienced softness in some key international markets, as well as in Chile, where unrest led to disruption in the majority of our stores. Walmex, China and Flipkart all had a solid quarter.

"The holiday season delivered positive transaction growth and underlying expense leverage was strong for the quarter. However, it wasn’t as good as expected due to lower sales volumes and some pressure related to associate scheduling. We understand the factors that affected our results and are developing plans to address them. We remain confident in our business strategy and our ability to deliver value and convenience for our customers through an integrated omnichannel offering across the globe.”

Learn more about Walmart's UK performance, here.

Source : Walmart

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19 February 2020

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