We review Walmart's fourth quarter and full year results, as it outlines the next phase of its growth and development.
Walmart's key numbers
- Walmart's total revenue in Q4 increased by 7.3% to $152.1bn, representing an additional $10.4bn
- Sales in its US stores increased by 7.9%, with Sam’s Club's sales up 8.1%
- US ecommerce sales increased 69%
- US comp store sales increased by 8.6%, with ticket up 21.9% and transactions down 10.9%
- Sam’s Club comp sales (ex-fuel) were up 10.8%
- International net sales increased by 5.5% to $34.9bn, up 6.3% on a constant currency basis
- Adjusted operating income decreased by 3.2% to $5.7bn
- Full year sales increased 6.7% to $559.2bn
- Full year adjusted operating income increased by 9.3% to $23.4bn
- US ecommerce sales increased 79% for the full year
Our view: set to accelerate progress
Walmart’s results for the full year demonstrate the strength of its performance during the pandemic, underpinned by its omnichannel approach. The retailer was able to optimise previous investments in technology, people and ecommerce capabilities. We expect the retailer to accelerate its progress in several areas in 2021 to capitalise on further growth opportunities, including deploying additional investment into areas such as ecommerce capacity and fulfillment automation. The retailer has emerged as one of the winners from the pandemic.
US: robust holiday results
Walmart delivered strong results through the quarter including robust holiday sales. Sales growth accelerated in January due to stimulus-related spending, with food comp store sales accelerating as the quarter progressed. In line with most retailers, customers consolidated their store visits, building significantly larger average baskets and purchasing more online. Food sales reflected broad-based strength across most categories, with availability improving through the quarter. Store pickup and delivery saw record high sales volumes.
International: positive comp sales in almost all key markets
Walmart delivered positive comp sales in seven of its nine key markets, with strong top-line growth led by Flipkart in India, Canada and Mexico. In Canada, net sales and comp store sales increased 8.6%, with ecommerce sales up 229%. For Walmex, net sales increased 4.9%, led by Mexico with comp sales in the market up 4.9%. Ecommerce sales were up 171%. In China, net sales increased 2.9%, with comp store sales up 2.9% and ecommerce sales up 65%. It is also worth noting that this month, Walmart divested its operations in the UK.
Sam’s Club: increases in transactions and ticket
Sam’s Club saw increases in both transactions and average ticket, with broad strength across all categories. Fresh, freezer and cooler delivered comp sales growth in the high teens, while consumables were up over 20%. Membership income increased 12.9% with improvements in the total number of members, up 28%, and overall renewal rates.
Outlook: low single-digit sales growth in fiscal 2022
For fiscal 2022, the retailer is expecting net sales to decline, on a constant currency basis, but to be up in the low single-digits, excluding divestments. In the US, comp store sales are forecast to grow by a similar amount, excluding fuel. However, the duration of the pandemic, vaccine distribution and stimulus programmes in the US could all have an impact on this. Consolidated operating income is expected to remain flat to up slightly, excluding divestments. In the year ahead, capital investments are expected to be almost $14bn.
Where is grocery retail heading in North America?
23 February 2021
10:00AM - 11:00AM EST
3:00PM - 4:00PM GMT
Join us as we discuss the trends driving change in North America and the impact of COVID-19 on the store of the future.
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