Walmart (WMT) reports Q4 fiscal 2020 earnings

Walmart earnings and revenue for the holiday quarter missed analysts’ estimates, as the retailer cited softness in toys and apparel during December.

The company said earnings took a hit, in part, because of political unrest in Chile, where protests have caused disruption in Walmart stores in the region.

Its profit outlook for the upcoming year came up short of expectations. Walmart said it is still monitoring the deadly coronavirus outbreak and said, so far, it hasn’t impacted its financial forecast.

Walmart shares fell more than 2% in premarket trading Tuesday on the news.

Here’s what the company reported compared with what analysts were expecting for Walmart’s fiscal fourth quarter, based on Refinitiv data:

  • Earnings per share: $1.38, adjusted, vs. $1.43 expected
  • Revenue: $141.67 billion vs. $142.49 billion expected
  • Same-store sales: up 1.9% in the U.S. vs. growth of 2.3% expected

“The holiday season … wasn’t as good as expected due to lower sales volumes and some pressure related to associate scheduling,” CFO Brett Biggs said.

Walmart reported net income for the quarter ended Jan. 31 of $4.14 billion, or $1.45 cents a share, compared with $3.69 billion, or $1.27, a year ago. Excluding one-time items, Walmart earned $1.38 a share, short of expectations for $1.43 per share, according to a poll by Refinitiv.

It said disruption in Chile impacted operating income by roughly $110 million.

Revenue grew about 2.1% to $141.67 billion from $138.79 billion a year ago. But that was short of estimates for $142.49 billion.

Sales at Walmart stores in the U.S. open for at least 12 months, and its website, were up 1.9%, short of expectations for 2.3%.

E-commerce sales during the quarter were up 35%, down from 41% in the prior quarter. For the year, Walmart reported online sales growth of 37%. The company had been calling for growth of 35%.

For fiscal 2021, Walmart is now calling for e-commerce growth of roughly 30%. It said earnings are expected to fall within a range of $5.00 to $5.15 a share. Analysts had been calling for annual earnings of $5.22 per share.

Walmart announced the results ahead of the company holding a meeting with investors in New York.

Wall Street has been eager to see how Walmart fared this holiday season.

The big-box company didn’t release its holiday results, but rival Target’s holiday sales results disappointed, with Target citing weakness in toys, leading many to believe Walmart’s results would be similarly less upbeat.

As Walmart’s grocery business has been on fire, its e-commerce operations have been more controversial. And some of its bets have failed.

As Walmart’s grocery business has been on fire, its e-commerce operations have been more controversial. And some of its bets have failed.

Just last week, Walmart said it would be discontinuing its text-to-order e-commerce service, known as Jetblack. It launched the business in New York back in 2018. But it hasn’t been able to make money on the project, nor grow the audience at scale, according to reporting by The Wall Street Journal. Instead, Walmart said it plans to incorporate some of Jetblack’s technology into its own business.

It sold ModCloth, a clothing start-up it had previously acquired in a bid to grow the reach of its audience, last year. Another one of its acquisitions, Bonobos, laid off employees last year. And Bonobos founder Andy Dunn late last year announced his departure from Walmart. Dunn had been tasked with helping the head of Walmart’s U.S. e-commerce business, Marc Lore, acquire digital brands.

There has also been ample shake-up among Walmart’s executive ranks of late.

Last month, it said its chief merchant Steve Bratspies would be departing. That news came after the chief merchant for Walmart’s U.S. e-commerce business, Ashley Buchanan, left in December to become CEO of crafts retailer Michael’s. And last summer, Walmart integrated many Jet.com positions into its own business, eliminating the Jet.com president role.

Walmart has said it is on track to report e-commerce sales growth of 35% for the year. During the third quarter, online sales were up 41%.

Walmart shares are up about 19% over the past 12 months. It has a market value of roughly $332.7 billion.

This is breaking news. Please check back for updates.

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