Walmart, Inc. (NYSE: WMT) blames softer holiday sales for its weaker than expected earnings for the fiscal fourth quarter, which ended Jan. 31.
The largest retailer in the world reported adjusted earnings per share (EPS) of $1.38, 6 cents lower than analysts’ expectations for the quarter.
The company reported a 2.1% year-over-year increase in consolidated revenue to $142 billion, but noted softness around the holiday season as the reason for the shortfall relative to expectations.
“In the fourth quarter, 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,” stated Walmart President and CEO Doug McMillon.
For full-year fiscal 2020 the company reported a 2.8% year-over-year increase in U.S. comparable sales, which included 37% growth in U.S. ecommerce sales.
In fiscal fourth quarter 2020, Walmart reported a 1.9% year-over-year increase in U.S. net sales, spurred by a 35% increase in ecommerce sales, specifically in grocery pickup and delivery, and robust online activity.
In December, the company announced a pilot for home grocery delivery using autonomous delivery vehicles provided by Nuro, a robotics company focused on driverless delivery.
“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,” said Walmart Chief Financial Officer Brett Biggs.
The company’s fiscal full-year 2021 guidance calls for net sales growth of approximately 3%, closer to 2.5% in the U.S, with ecommerce net sales in the U.S. growing approximately 30%. Adjusted EPS is expected to be in the range of $5.00 to $5.15, which is lower than the current consensus estimate of $5.23.
Additionally, the company’s guidance does not include any potential negative impact from the coronavirus. Management said that there were “too many moving parts” to factor the impact from the outbreak into its forecast during its 2020 Investment Community Meeting held this morning.
Management said that it expects to reach $50 billion in global ecommerce sales this year. Walmart’s ecommerce business has not reached profitability yet.
Many of the nation’s largest truckload carriers deliver freight on behalf of Walmart.
Walmart and a group of trucking interests including the American Trucking Associations (ATA) continue to challenge the $54.6 million award to California truck drivers for back wages on time spent during layovers.