Walmart (WMT) 2020 Q4 Earnings Results

Walmart Inc. (NYSE:WMT) history dates back to 1962 when businessman Sam Walton launched the first Walmart Discount City store in Rogers, Arkansas. It initially grew in rural areas, avoiding direct competition with the retail giants of that time. Over the years, the company established new retail formats such as Sam’s Club discount warehouses. The continued expansion in both domestic and overseas markets helped Walmart to become the world’s largest grocery chain.

The company on Thursday announced mixed results for the fourth quarter along with a weak outlook. Walmart reported a loss of $2.09 billion, or 74 cents per share for the quarter, as compared to earnings of $1.45 per share in the same period last year. On an adjusted basis, the retail giant reported a profit of $1.39 per share that missed the consensus forecast of $1.51 per share.

Revenue came in at $152.08 billion, beating analysts’ average estimate of $148.51 billion. U.S. comparable sales in the quarter rose 8.6 percent, while analysts were looking for a rise of 5.6 percent.

On the bright side, online sales in the U.S. skyrocketed 69 percent, well above a 35 percent surge in the comparable quarter of the prior year. Comparatively, same-store sales at Sam’s Club rose 8.5 percent in Q4.

However, Walmart incurred $1.1 billion in pandemic-related costs during the quarter, as it had to pay bonuses to front-line workers and spend more to ensure the cleanliness of its stores. Nevertheless, the company increased its annual dividend by 2 percent to 55 cents, besides approving a stock repurchase plan worth $20 billion.

Looking forward, the company expects its capital costs to hit $14 billion this year, as it plans to spend on improving the supply chain, customer experience, and automation.

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Walmart shares fell nearly 6 percent in the mid-day trading Thursday following Q4 results. The company expects its earnings to be marginally down or flat for the current fiscal year.