On Thursday, Walmart Inc expected declining profits for fiscal 2022, after a blockbuster year that saw demand for essentials and other products skyrocket as shoppers flocked to the store amid coronavirus pandemic lockdowns.
In fiscal 2022, ending January 31, the world’s largest retailer predicted adjusted net revenues to rise in the low single digits, far smaller than the 8.5 percent increase seen in the previous year. According to Refinitiv, it also forecasts earnings per share to be flat-to-slightly up, below the 2.2 percent growth analysts have been predicting.
After Walmart also announced it took on around $1.1 billion in pandemic-related expenses during the period, including higher pay for factory staff, incentives for retail managers, and costs related to maintaining the stores safe, shares were down 4 percent in premarket trade.
Walmart, which in the United States employs 1.5 million employees, said it increased salaries to an average of more than $15 per hour. Pressure for electronics, toys, and groceries drove an early start to the holiday season and a boost from stimulus money late in the fourth quarter.
According to IBES data from Refinitiv, revenue at U.S. stores open at least a year jumped 8.6 percent, except diesel, in the three months ended Jan. 31, way above analysts’ estimates for a 5.6 percent growth.
No content stimulus is really included in the advice we are going to give this morning because we just don’t know what’s going to happen. That’s definitely a tailwind for us if we have more stimulus,’ Chief Financial Officer Brett Biggs told Reuters in an interview.
In the quarter, online sales increased 69 percent, blowing past a 35 percent rise in the year-earlier period, but slower in the third quarter than a 79 percent increase.
During the pandemic, the store relied on its size and enhanced online presence to draw new buyers looking for a one-stop-shop for their everyday needs.
In the quarter, net profits grew 3.1% to $5.49 billion, while adjusted earnings were $1.39 per share. On average, analysts estimated the organization to receive $1.51 per share.