Walmart (NYSE: WMT), the major U.S. retailer, reported flat earnings on Tuesday in its fourth-quarter earnings call. The company reported a Net Income of $4.14 billion for the quarter, almost 12.3% higher than $3.69 billion reported in the 4th quarter of last year. Revenue reported was $140.6 billion, an increase of 2.1%; slightly below analyst expectations of $141.5 billion

Adjusted Earnings per share came to be $1.38 below analyst expectations of $1.44. This was a rate profit miss for Walmart. It is only the second time in the last 18 quarters that Walmart has missed its E.P.S. guidance.

The company also issued weak profit guidance for the fiscal year 2021. Walmart expects earnings per share to be between $5.00 & $5.15 for the coming full year. This expectation stands slightly below the market expectations of $5.22 earnings per share. The company raised its guidance on cash dividend in 2021 to $2.16 per share, an increase of 1.9% from the $2.12 per share in 2020.

In its earnings release, Doug McMillon, President and CEO of Walmart, said: “In Q4, we saw strong performance in the U.S. with eCommerce and Sam’s Club plus strength in Mexico, India, and China. We started and finished the quarter with momentum, while sales leading up to Christmas in our U.S. stores were a little softer than expected.”The markets absorbed the news void of any visible worries and the shares closed for the day at a flat $119.

Walmart continues to be a dominant retailer despite increasing competition from online disruptors like Amazon. Walmart still continues to be recognized as a well-managed company whose strength lies in its extremely strong, cash generation business model and disciplined financial approach. The company continues to be a good value investment. The ability of the company to capture market share online offers additional upside opportunities.

Leave a Reply

Your email address will not be published. Required fields are marked *