Walmart posts higher profits as consumers continue to spend
Walmart battled rising inflation and shaky consumer confidence in the fourth quarter as sales rose and profits rose, beating analysts’ expectations.
The country’s biggest retailer said on Thursday that its total revenue reached $152.9 billion, up 0.5% from a year earlier, while its operating profit rose by 7.3% to $5.9 billion.
The company reported earnings per share of $1.53, which was higher than the $1.50 expected by many analysts.
“We had another strong quarter to end a strong year,” company chief executive Doug McMillon said in a statement. “We have momentum in our business in all three segments. We are aggressive with our plans and execute strategy.
The earnings report comes a day after the Commerce Department said retail sales jumped 3.8% in January from a month earlier, a sign of the economy’s resilience in the face of the pandemic. The increase was attributed to increased consumer spending, but also, in part, to rapidly rising prices.
As the nation’s largest grocery chain, Walmart’s business is particularly sensitive to the effects of inflation, which has hit its highest level in four decades in the United States. The company, which employs more than 1.6 million people in the United States, also raised wages to compete for workers amid high turnover in the retail sector during the pandemic.
In the quarter ending Jan. 31, the company’s sales in its U.S. operations rose 5.7% to about $105 billion, while gross profit margins edged up. Asked about inflation during a conference call with analysts, Walmart executives said the company was managing inflationary pressures, but did not say whether cost increases were being passed on to customers.
Looking ahead, Walmart said Thursday it expects total sales growth of about 4% in the coming year and is raising its annual dividend by 2% to $2.24. per share.
Walmart’s stock price rose 2.75% in premarket trading.