Walmart has posted another solid sales increase in the fourth quarter as the retail giant continued to gain market share, especially in the US.
The company’s revenue for the quarter ended January 31 rose 5.6 per cent to $190 billion, following the 5.8 per cent uplift in the third quarter.
“Walmart may have a new CEO, but it’s very much business as usual in terms of performance as the retail giant continues its winning streak,” commented GlobalData MD Neil Saunders.
At Walmart US, which Saunders described as the heart of the company’s success, sales rose 4.6 per cent on both a total and comparable basis.
The increase represented a solid market share gain, particularly in grocery, as more customers than ever turned to Walmart this holiday season, Saunders said.
“This includes one of the largest ever shares of higher income shoppers who are, primarily, attracted to Walmart for the value for money it provides.
“However, we are also seeing a shift in the dynamic as an increasing number of wealthier consumers buy into non-food ranges. Some of this is driven by a desire to save money, but much is also the result of Walmart elevating assortments and in-store experiences,” he added.
E-commerce was also the highlight of the business with a 27 per cent sales uplift, driven by both higher income shoppers and the increased penetration among younger shoppers.
While Walmart has a lot of headroom for growth in both its marketplace business and for online groceries, the landscape is not one free from challenge, Saunders noted.
“Amazon’s intention to increase the penetration of perishable products into its delivery network and its general expansion of faster delivery into more rural areas puts the two retail giants at loggerheads. For now, there is enough organic growth in online, especially for food, to feed both. But, over time, competition will intensify,” he said.
Away from the US business, international net sales soared 11.5 per cent in Q4, aided by some helpful currency fluctuations. Sam’s Club sales increased 2.9 per cent amid membership growth.
On the bottom line, operating income grew 10.8 per cent to $8.7 billion. Net income declined 19 per cent, but Saunders noted this was due to exceptional items rather than a squeeze on operating profit.
For the full year, revenue increased 4.7 per cent to $713.2 billion, and net income rose 12.6 per cent to $21.8 billion.
The company expects its net sales to grow 3.5-4.5 per cent in constant currency in FY27.
“In our view, this [outlook] is extremely solid – especially as it comes off the back of a very long run of great growth and against the backdrop of somewhat lower inflation,” Saunders said.
