Walmart reported disappointing earnings and issued a lackluster profit forecast Tuesday following a holiday sales slump.
Both online and in-store sales saw weaker-than-expected gains in the quarter ending Jan. 31, which included the shorter-than-usual holiday shopping season. The retail giant reported adjusted earnings per share of $1.38, falling short of Wall Street’s expectation of $1.44.
“The fourth quarter started and ended strong with solid sales growth through Cyber Monday and in January,” Walmart chief financial officer Brett Biggs said in a statement. “In the few weeks before Christmas, we experienced some softness in a few general merchandise categories in our US stores.”
Sales at Walmart’s US stores open at least a year rose just 1.9 percent in the last quarter, falling short of analysts’ estimate of 2.35 percent as well as the 4.1 percent growth seen in the same period a year prior.
US online sales jumped 35 percent in the quarter, marking the slowest growth in almost two years and a decrease from the 41 percent rise seen in the prior quarter. Amazon, by contrast, has claimed that it posted “record-breaking” sales during the holiday season, though the e-commerce colossus did not provide specific data.
“Overall, we think Walmart likely wasn’t immune from some of the [near-term] pressures like a shortened holiday season,” which also affected rivals such as Target, UBS analyst Michael Lasser said in a Tuesday note.
Walmart shares jumped 1.2 percent Tuesday despite the disappointing report to trade at $119.34 as of 12:48 p.m.
Walmart said it expects to post profits of $5.00 to $5.15 per share for the current fiscal year, below the expected earnings of $5.22. Online sales are expected to grow 30 percent, down from 37 percent in the prior year.
But those forecasts don’t include any effects of the deadly coronavirus outbreak in China, where Walmart runs more than 400 stores.
“Walmart’s weak guidance outlook for 2021 indicate that more storm clouds are on the horizon, even without accounting for the effects of coronavirus’ spread,” Jesse Cohen, a senior analyst at Investing.com, told Reuters.
With Post wires
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