Walmart FY23 Q4 Report: Early spending brings revenue growth, continues to face an uncertain future

The global retail giant Wal-Mart announced its financial report for the fourth quarter of fiscal year 2023 as of January 31. Both revenue and net profit exceeded expectations, but the stock price reflected more generally . Profit and same-store sales outlooks missed expectations.

FY2023 Q4 achieved operating income of US$164.1 billion, a year-on-year increase of 7.3%, significantly higher than Wall Street's forecast of US$159.6 billion; net profit of US$6.3 billion, much higher than the US$3.6 billion in the same period last year. Under the Non-GAAP standard, Wal-Mart's Q4 adjusted earnings per share were $1.71, Wall Street expected $1.51, and $1.53 in the same period last year.

Wal-Mart divides its business into three segments: Wal-Mart America (mainly including Wal-Mart hypermarkets and e-commerce businesses in the United States), Wal-Mart International (mainly including supermarkets, hypermarkets, and Sam’s Club stores in countries and regions outside the United States) , e-commerce, etc.), and Sam’s Club stores (mainly including Sam’s Club stores in the United States and Puerto Rico).

In terms of business sectors, Wal-Mart 's net sales in the first quarter of this fiscal year were US$113.7 billion, an increase of 8.0% year-on-year ; same-store sales increased by 8.3 % ( excluding the impact of fuel; the net sales growth rate of e -commerce business was 17 % .

Wal-Mart International's net sales in the quarter were US$ 27.6 billion, up 2.14 % year-on-year . Looking at totals for the second half of the year, international sales grew by more than 9% at constant exchange rates . E-commerce sales were strong with a penetration rate of 21%, with China leading the quarter with 48% penetration.

But this is just a prelude to consumption, not a recovery. Consumers, worried about rising prices, tend to buy more food, gifts and household items at a lower price at one time.

Sam's club's sales in the quarter were US$21.4 billion, up 11.3 % year-on-year , and same-store sales rose 12.2% ( excluding the impact of fuel) , mainly due to inflation and sales growth. Walmart US revenue rose 8.3%, average The ticket growth rate is 6.3 % , which is higher than the growth brought by transaction volume .

period , it achieved operating income of US $ 164.05 billion , a year - on-year increase of 7.31 %; of which net sales were US$ 162.74 billion , a year - on- year increase of 7.4 %, and membership fees and other business income were US$ 1.31 billion , a year-on-year decrease of -3.1 % .

Sam's e- commerce business increased by 21% year-on - year, and the continuous growth of store self-pickup and delivery in the fourth quarter drove e-commerce sales.

Consolidated gross margin decreased 8.3 basis points in the quarter , primarily due to additional price reductions to address carryover inventory balances and potential inflation in the cost structure.

in December . Higher sales and lower COVID-19 costs helped SG&A expense leverage, which leveraged 89 basis points in the quarter, offsetting gross Margin pressure. 

Inventory at the end of the quarter was unchanged from last year at $ 56.5 billion, with Wal-Mart in the U.S. reducing its inventory by nearly 3% . The company's aggressive rebalancing of inventories at the start of the year in response to a tougher environment and higher than expected inventory results puts the company in a strong position going into the year.

The performance guidance given by Wal-Mart gave investors a relatively low expectation, which led to the collapse of the consumer sector. For the first fiscal quarter of fiscal 2024, Walmart expects net sales excluding fuel to increase by 4.5% to 5% year-over-year and operating profit to increase by 3.5% to 4% year-over-year, adjusting for currency changes. Post-earnings per share ranged from $1.25 to $1.3. In terms of the full fiscal year, Wal-Mart predicts that, without considering exchange rate changes, the growth rate of net sales excluding fuel will be 2.5% to 3%, which is lower than the market expectation of 3.1%, and the growth rate of operating profit will be in the Around 3%, the adjusted EPS was between $5.9 and $6.05, below the consensus estimate of $6.53.

Sales in both higher-margin general merchandise and lower-margin categories like food "will get worse" in the coming months. Cautious consumer spending could weigh on margins, but overall fiscal 2023 will still benefit from strong grocery sales and a surge in purchases by high-income shoppers looking for bargains.