The Numbers
Walmart said its comparable store sales were up 4 percent in the three months that ended in late January compared with the year before. The number of transactions at Walmart rose 4.3 percent, but the average ticket price slightly decreased 0.3 percent, a sign that shoppers spent a little less on shopping trips.
The retailer’s online U.S. sales increased 17 percent, and its online global sales jumped 23 percent, surpassing $100 billion. Losses for the e-commerce business were slowing as the company spends less on fulfillment costs, John David Rainey, Walmart’s chief financial officer, said in an interview. He added that more customers were using Walmart’s delivery services, helping reduce costs.
“Instead of a Walmart delivery being delivered to one house on a cul-de-sac, now we’re dropping it off at two or three houses from that cul-de-sac,” Mr. Rainey said.
The Bigger Picture
Walmart is one of the first major retailers to report fourth-quarter earnings. Companies including Target, Macy’s and Kroger will do so in the coming weeks.
Compared with recent years, the latest holiday season was largely free from the pandemic’s disruptions. Supply-chain bottlenecks had eased, customers were back in stores and inflation had decelerated. Industrywide, holiday sales increased 3.8 percent, according to a release from the National Retail Federation in January. That was within the range that the trade organization predicted in November.
At the same time, many retailers, including Walmart, focused on value last year as the economy cooled and shoppers became more selective. Walmart’s sizable grocery business and emphasis on low prices helped insulate it from the sales declines that other retailers reported. The company said on Tuesday that its strong comparable sales were underpinned by sales in its food business.
“In food, prices are lower than a year ago in places like eggs, apples and deli snacks, but higher in other places like asparagus and blackberries,” Doug McMillon, Walmart’s chief executive, said during an earnings call.
Mr. Rainey said Walmart now has a wider assortment of private label brands than it did two years, as it catered to shoppers who were looking for lower priced items.
Walmart also said it would acquire the television maker Vizio in a deal worth $2.3 billion as it continues to increase Walmart Connect, its fast-growing advertising and media business.
The Road Ahead
Analysts expect retail sales to continue to moderate this year after a surge in consumer spending during the early stages of the pandemic.
Some signs are already appearing. U.S. retail sales fell 0.8 percent in January from a month earlier, according to data released from the Commerce Department last week. It was a larger-than-expected loss. Inflation last month also cooled less than expected.
Still, Walmart sees this as a time to expand. On Tuesday, it said it expected both net sales and operating income to increase this year. Last month it said it planned to open 150 new locations, a big jump from the past few years. It has also been increasing pay, bonuses and benefits for store managers in a bid to retain them.
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