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Walmart Inc. (WMT - Free Report) reported fourth-quarter fiscal 2022 results, wherein the top and the bottom lines advanced year over year and surpassed the respective Zacks Consensus Estimate. The company continued to increase its share in the U.S. grocery market. The company’s solid efforts to enhance the e-commerce game have been helping it stay firm against the growing competition.
Walmart concluded fiscal 2022 on a strong note, with impressive momentum in all three segments. WMT performed well amid escalated supply-chain costs as well as pandemic-related hurdles. Encouragingly, management unveiled a hike in its annual dividend.
Quarter in Detail
Walmart’s adjusted earnings of $1.53 per share rose 10.1% from the year-ago period’s figure of $1.39 and beat the Zacks Consensus Estimate of $1.50. Total revenues of $152.9 billion grew 0.5% and beat the consensus mark of $151.4 billion. On a constant-currency (cc) basis, total revenues climbed 0.6% to $153 billion. Revenues were hurt to the tune of about $10.2 billion related to divestitures.
Consolidated gross profit margin expanded 10 basis points (bps) to 23.8%. Management remains focused on competitive pricing globally. The gross margin at Walmart U.S. grew 54 bps due to efficient price management and a mix, somewhat countered by high supply-chain costs that came in at more than $400 million.
Adjusted operating income at cc rose 6.2% to $6 billion. However, the metric was adversely impacted by divestitures to the tune of about 60 bps. Consolidated operating expenses as a percentage of sales remained flat year over year. This reflects robust sales growth and a decline in expenses for COVID-19, offset by investments in wages.
Image Source: Zacks Investment Research
Segment Details
Walmart U.S.: The segment’s net sales grew 5.7% to $105.3 billion in the reported quarter. U.S. comp sales, excluding fuel, improved 5.6% due to a 3.1% rise in transactions and a 2.4% increase in the average ticket. Comp sales represented robust underlying business trends, led by in-store traffic and aided by sturdy consumer spending and robust holiday season sales. Comp sales grew across the general merchandise, grocery and health & wellness categories. The segment saw an increased market share in grocery.
E-commerce negatively impacted comps by 80 bps. E-commerce sales in the segment rose 1%. On a two-year stack basis, e-commerce sales surged 70%. As of the fourth quarter, Walmart U.S. had 4,600 pickup locations and 3,500 same-day delivery stores. The company remodeled more than 140 stores during the reported quarter. Adjusted operating income at the Walmart U.S. segment grew 0.3% to $5.2 billion.
Walmart International: The segment’s net sales fell 22.6% to $27 billion. Divestitures hurt the segment’s net sales by $10.1 billion. On a cc basis, net sales dropped 22.1% to $27.2 billion. The strength in Flipkart, Mexico and China was an upside. Adjusted operating income, on a cc basis, slumped 12% to $0.8 billion.
Sam’s Club: The segment, which comprises membership warehouse clubs, witnessed a net sales increase of 16.5% to $19.2 billion. Sam’s Club comp sales, excluding fuel, grew 10.4%. While transactions grew 7%, the average ticket rose 3.2%. Comp sales saw broad-based strength across categories, mainly led by food. However, tobacco hurt comp sales.
Membership income climbed 9.1% in the quarter, reflecting solid membership trends, with a record total member count. The plus penetration rate also ascended and reached an all-time high. E-commerce fueled comps by 100 bps. E-commerce net sales jumped 21% at Sam’s Club on a robust direct-to-home show and solid curbside performance. The segment’s operating income came in at $0.5 billion, up 41.1% year over year.
Other Financial Updates & Developments
Walmart ended the quarter with cash and cash equivalents of $14.8 billion, long-term debt of $34.9 billion and total equity of $91.9 billion. In fiscal 2022, WMT generated operating cash flow of $24.2 billion and incurred capital expenditures of $13.1 billion, resulting in free cash flow of $11.1 billion.
The company allocated $6.2 billion for dividend payouts and $9.8 billion for share buybacks during the fiscal. In a separate release, Walmart raised its annual dividend by about 2%, taking it to $2.24 per share for fiscal 2023. This marks the company’s 49th straight annual dividend hike.
Guidance
Walmart issued its view for fiscal 2023. The company expects consolidated net sales growth of nearly 3% at cc. Excluding divestitures, the metric is likely to grow nearly 4%.
U.S. comp sales, excluding fuel, are likely to be more than 3%.
Consolidated operating income is expected to grow nearly 3% at cc and at a greater rate than net sales on excluding divestitures. Management envisions earnings per share (EPS) growth in the mid-single digit range. Excluding divestitures, it is expected to rise 5-6%.
Shares of this Zacks Rank #3 (Hold) company have dropped 10.4% in the past six months compared with the industry’s decline of 8.9%.
Albertsons Companies, a leading food and drug retailer in the United States, sports a Zacks Rank #1 (Strong Buy). The company has an expected EPS growth rate of 8% for three to five years. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Albertsons Companies’ current financial-year sales suggests growth of 1.6% from the year-ago period. ACI has a trailing four-quarter earnings surprise of 31.8%, on average.
Boot Barn, which is a lifestyle retail chain, carries a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 47.1%, on average.
The Zacks Consensus Estimate for Boot Barn’s current financial-year sales suggests growth of 62.6% from the year-ago period. BOOT has an expected EPS growth rate of 20% for three to five years.
Dollar Tree, the operator of discount variety retail stores, holds a Zacks Rank #2 (Buy). Dollar Tree has a trailing four-quarter earnings surprise of 8.8%, on average. The company has an expected EPS growth rate of 12.2% for three to five years.
The Zacks Consensus Estimate for DLTR’s current financial-year sales suggests growth of 3.4% from the year-ago period.
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Walmart (WMT) Beats Q4 Earnings Estimates, Hikes Dividend
Walmart Inc. (WMT - Free Report) reported fourth-quarter fiscal 2022 results, wherein the top and the bottom lines advanced year over year and surpassed the respective Zacks Consensus Estimate. The company continued to increase its share in the U.S. grocery market. The company’s solid efforts to enhance the e-commerce game have been helping it stay firm against the growing competition.
Walmart concluded fiscal 2022 on a strong note, with impressive momentum in all three segments. WMT performed well amid escalated supply-chain costs as well as pandemic-related hurdles. Encouragingly, management unveiled a hike in its annual dividend.
Quarter in Detail
Walmart’s adjusted earnings of $1.53 per share rose 10.1% from the year-ago period’s figure of $1.39 and beat the Zacks Consensus Estimate of $1.50. Total revenues of $152.9 billion grew 0.5% and beat the consensus mark of $151.4 billion. On a constant-currency (cc) basis, total revenues climbed 0.6% to $153 billion. Revenues were hurt to the tune of about $10.2 billion related to divestitures.
Walmart Inc. Price, Consensus and EPS Surprise
Walmart Inc. price-consensus-eps-surprise-chart | Walmart Inc. Quote
Consolidated gross profit margin expanded 10 basis points (bps) to 23.8%. Management remains focused on competitive pricing globally. The gross margin at Walmart U.S. grew 54 bps due to efficient price management and a mix, somewhat countered by high supply-chain costs that came in at more than $400 million.
Adjusted operating income at cc rose 6.2% to $6 billion. However, the metric was adversely impacted by divestitures to the tune of about 60 bps. Consolidated operating expenses as a percentage of sales remained flat year over year. This reflects robust sales growth and a decline in expenses for COVID-19, offset by investments in wages.
Image Source: Zacks Investment Research
Segment Details
Walmart U.S.: The segment’s net sales grew 5.7% to $105.3 billion in the reported quarter. U.S. comp sales, excluding fuel, improved 5.6% due to a 3.1% rise in transactions and a 2.4% increase in the average ticket. Comp sales represented robust underlying business trends, led by in-store traffic and aided by sturdy consumer spending and robust holiday season sales. Comp sales grew across the general merchandise, grocery and health & wellness categories. The segment saw an increased market share in grocery.
E-commerce negatively impacted comps by 80 bps. E-commerce sales in the segment rose 1%. On a two-year stack basis, e-commerce sales surged 70%. As of the fourth quarter, Walmart U.S. had 4,600 pickup locations and 3,500 same-day delivery stores. The company remodeled more than 140 stores during the reported quarter. Adjusted operating income at the Walmart U.S. segment grew 0.3% to $5.2 billion.
Walmart International: The segment’s net sales fell 22.6% to $27 billion. Divestitures hurt the segment’s net sales by $10.1 billion. On a cc basis, net sales dropped 22.1% to $27.2 billion. The strength in Flipkart, Mexico and China was an upside. Adjusted operating income, on a cc basis, slumped 12% to $0.8 billion.
Sam’s Club: The segment, which comprises membership warehouse clubs, witnessed a net sales increase of 16.5% to $19.2 billion. Sam’s Club comp sales, excluding fuel, grew 10.4%. While transactions grew 7%, the average ticket rose 3.2%. Comp sales saw broad-based strength across categories, mainly led by food. However, tobacco hurt comp sales.
Membership income climbed 9.1% in the quarter, reflecting solid membership trends, with a record total member count. The plus penetration rate also ascended and reached an all-time high. E-commerce fueled comps by 100 bps. E-commerce net sales jumped 21% at Sam’s Club on a robust direct-to-home show and solid curbside performance. The segment’s operating income came in at $0.5 billion, up 41.1% year over year.
Other Financial Updates & Developments
Walmart ended the quarter with cash and cash equivalents of $14.8 billion, long-term debt of $34.9 billion and total equity of $91.9 billion. In fiscal 2022, WMT generated operating cash flow of $24.2 billion and incurred capital expenditures of $13.1 billion, resulting in free cash flow of $11.1 billion.
The company allocated $6.2 billion for dividend payouts and $9.8 billion for share buybacks during the fiscal. In a separate release, Walmart raised its annual dividend by about 2%, taking it to $2.24 per share for fiscal 2023. This marks the company’s 49th straight annual dividend hike.
Guidance
Walmart issued its view for fiscal 2023. The company expects consolidated net sales growth of nearly 3% at cc. Excluding divestitures, the metric is likely to grow nearly 4%.
U.S. comp sales, excluding fuel, are likely to be more than 3%.
Consolidated operating income is expected to grow nearly 3% at cc and at a greater rate than net sales on excluding divestitures. Management envisions earnings per share (EPS) growth in the mid-single digit range. Excluding divestitures, it is expected to rise 5-6%.
Shares of this Zacks Rank #3 (Hold) company have dropped 10.4% in the past six months compared with the industry’s decline of 8.9%.
3 Retail Stocks to Bet on
Here are three better-ranked stocks – Albertsons Companies (ACI - Free Report) , Boot Barn Holdings, Inc. (BOOT - Free Report) and Dollar Tree (DLTR - Free Report) .
Albertsons Companies, a leading food and drug retailer in the United States, sports a Zacks Rank #1 (Strong Buy). The company has an expected EPS growth rate of 8% for three to five years. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Albertsons Companies’ current financial-year sales suggests growth of 1.6% from the year-ago period. ACI has a trailing four-quarter earnings surprise of 31.8%, on average.
Boot Barn, which is a lifestyle retail chain, carries a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 47.1%, on average.
The Zacks Consensus Estimate for Boot Barn’s current financial-year sales suggests growth of 62.6% from the year-ago period. BOOT has an expected EPS growth rate of 20% for three to five years.
Dollar Tree, the operator of discount variety retail stores, holds a Zacks Rank #2 (Buy). Dollar Tree has a trailing four-quarter earnings surprise of 8.8%, on average. The company has an expected EPS growth rate of 12.2% for three to five years.
The Zacks Consensus Estimate for DLTR’s current financial-year sales suggests growth of 3.4% from the year-ago period.