Walmart shares fall on earnings miss, retailer sees sales growth slowing in coming year

Earnings

A worker wearing a protective mask arranges shopping carts outside a Walmart store in Duarte, California, U.S., on Thursday, Nov. 12, 2020.

David Swanson | Bloomberg | Getty Images

Walmart is set to report its fiscal fourth-quarter earnings before the bell on Thursday.

Here’s what Wall Street is expecting:

  • Earnings per share: $1.50 expected, according to Refinitiv’s consensus estimates
  • Revenue: $148.3 billion expected by Refinitiv estimates
  • U.S. same-store sales, excluding fuel: gain of 5.8% expected by StreetAccount’s survey

The big-box retailer has benefited from pandemic trends, from cooking to doing puzzles at home, and likely got a boost from stimulus checks. The $600 checks gave a jolt to retail sales, which rose 5.3% in January. Walmart’s e-commerce sales in the U.S. have soared in recent quarters, too, though that rate has slowed. They rose by 74% in the first quarter, 97% in the second quarter and 79% in the third quarter, respectively.

Yet analysts and shareholders have watched to see whether the retailer can sustain its momentum and turn its growing online business into a profitable one. Many services that have gained popularity during the pandemic, such as curbside pickup, require higher costs and additional labor as Walmart turns more of its employees into personal shoppers that pick and pack. Its e-commerce business has yet to turn a profit. Marc Lore, the former Jet.com founder who led Walmart’s online strategy, recently announced his departure.

Walmart has looked to a new subscription service, Walmart+, as part of its strategy. It has pitched the membership program as a way to deepen loyalty and win more of customers’ wallets. The service costs  $98 for a year or $12.95 for a month. The company has not shared its total membership — a number that analysts and investors have been curious to hear.

The company also announced plans to turn parts of some stores into local fulfillment centers, mini warehouses that use robots and personal shoppers to more quickly complete online orders.

As of Wednesday’s close, Walmart shares are up nearly 25% over the past year. They closed at $147.20 on Wednesday, bringing the company’s market value to $416.47 billion.

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