Walmart reported great fourth-quarter earnings, which boosted the company’s dividend. The stock climbed 1.7% in morning trading to $135.80. Walmart (ticker: WMT) reported adjusted earnings per share of $1.53 in its fiscal fourth quarter ended in January.
Revenue was $152.9 billion, a gain of 0.5%, which also beat the FactSet consensus of $151.72 billion. Net income was set at $3.56 billion, or $1.28 a share, compared with a loss of $2.09 billion, or 74 cents a share, a year earlier. Analysts set the earnings expectation at $1.50 a share, compared with earnings per share of $1.39 a year earlier.
Sales from comparable stores increased 6.3% year over year for both Sam’s Club, the company’s wholesale, retail segment, and Walmart, not including fuel sales.
Sam club experienced an increase in membership by 9% and sales of $19.2 billion.
Supply-chain costs were $400 million higher in the quarter than planned, the company announced on its earnings call. Covid- related leave costs were $300 million more than expected. However, the company remains optimistic in its ability to limit passing the rising prices on to consumers.
“We’re seeing about the same number of rollbacks now that we had at the end of Q1 last year, so we have supply-chain challenges and other costs coming through,” said John Furner, president and CEO of Walmart U.S. “The team did do a nice job managing mix and pricing and are looking after both our customers and our shareholders.”
According to the company, it was on track to hit its 2023 financial targets, expecting U.S comparable- sales growth of roughly above 3%, excluding fuel and per-share earnings growth in the mid-single digits. Analysts hold the expectation that same-store sales growth of 2.7% and earnings per share of $6.70.
The company also reported that it raised its quarterly dividend by 1 cent to 56 cents a share and also has plans to repurchase $10 billion of its own stock in fiscal 2023.
Wallmart stock has fallen more than 8% since the beginning of the year.
While it wasn’t the most successful quarter, there was still a lot to like about it. Walmart was the first major retailer to report results in what was admittedly a trying time for the sector- consumers struggling with record inflation and the end of government stimulus packages plus the enhanced child tax credit.
Sales didn’t drop from the levels recorded a year ago despite analyst predictions. Also, the company reached nearly 10 billion in share repurchases for the fiscal year, a pace it plans to continue. Walmart experienced a surprise expansion in gross margins- up 54 basis points for its domestic business- a great performance given the supply chain issues.
The company also registered a 26% global increase in inventory, while most other retailers are still struggling to keep items in stock. It reported that it increased capacity by nearly 20% last year for its subscription service Walmart + and plans to increase capacity by 35% this year.