Walmart (WMT) stock up after beating Q4 expectations, raises guidance

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Walmart (WMT) stock up after beating Q4 expectations, raises guidance

 Walmart (WMT) stock up after beating Q4 expectations, raises guidance
Image source: Novikov Aleksey,Shutterstock

Highlights

  • Walmart Inc’s (NYSE: WMT) revenue increased by 2.4% YoY to US$572.8 billion in FY22.

  • Net income came in at US$13.6 billion, up 1.2% YoY.

  • Walmart expects EPS to increase in the mid-single digits in fiscal 2023.

Walmart Inc. (NYSE: WMT) declared its fourth-quarter and fiscal 2022 results, beating analysts’ expectations for profit and sales, on Thursday.  

The stock rose 2.63% to US$137.04 in the premarket after the results.

Fourth quarter earnings 

Its revenue increased by 0.5% YoY to US$152.9 billion in the fourth quarter. 

The operating income grew by 7.3% to US$5.9 billion.  

The consolidated net income to the company rose to US$3.56 billion from a net loss of US$2.09 billion in the year-ago quarter. Earnings per share diluted advanced to US$1.28 from a loss EPS diluted of US$0.74 in the same period of the previous year.

Its inventory levels went up by 26% globally, and 28% in the US, but affected by higher goods and transit cost. However, it managed to keep its operating expenses almost flat. 

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Full-Year 2022 earnings 

Its total revenue increased 2.4% YoY to US$572.8 billion.

 The Walmart US segment comparable sales grew by 6.4% in FY 2022, while net sales rose by 6.3% to US$393.2 billion from the previous year. 

 Net sales for the Walmart International segment declined 16.8%, to US$101 billion, and Sam’s Club segment net sales grew 15.1% to US$73.6 billion in fiscal 2022. It reported an 11.3% increase in the membership income.

 Walmart US eCommerce sales grew by 11.0%, driven by its marketplace growth and fulfillment services in the US, India, and Mexico. The company added roughly 20,000 new sellers to the US marketplace. 

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Its net income came in at US$13.6 billion, an increase of 1.2% YoY for FY 2022. The GAAP earnings per share came in at US$4.87, and the adjusted earnings per share was US$6.46.

Its operating cash flow decreased about 33% to US$24.2 billion due to costly inventory and other purchases to support sales and wage payments. Out of the operating cash flow, it paid US$6.2 in dividends and US$9.8 billion for share repurchase, which is around 50% of the US$20 billion authorized last year.  

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(Walmart (WMT) beats expectations, forecast stronger 2023) 

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The full-year 2023 Guidance

Walmart expects consolidated net sales to increase by around 3% in constant currency. Comparable sales for Walmart US to grow slightly above 3%. 

The EPS growth is expected to increase in the mid-single digits.           

 The company expects to increase the capital expenses on automation, technology, and supply chain at the upper end of 2.5% to 3% of net sales in FY2023. 

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Walmart’s revenue and net income grew despite pandemic disruptions. It currently employs some 2.3 million associates. Around 230 million customers and members visit its stores and clubs in 24 countries and eCommerce websites every week. Currently, it has a market capitalization of US$378.3 billion.

Bottomline

Though the supply chain costs were high, Walmart’s massive presence worldwide helped generate growth. Walmart Connect, the ad unit, saw a 136% increase in active US advertisers.   

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