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Walmart Reports Record Q4, FY21 Revenue At Annual Meeting

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Walmart reported annual revenue of nearly $560 billion in FY21 that resulted in $35 billion of growth; $40 billion of growth in constant currency. The report came at the Feb. 18 annual meeting for the investment community.

The Bentonville, Arkansas-based company’s leadership team highlighted how the company will build on its strong performance and existing momentum with customers. The company’s strong financial position makes it the right time to accelerate investments in key areas, enabling it to grow faster while leveraging its unique assets to build a business model that will define the next generation of retail.

The company’s integrated omnichannel strategy focuses on:

  • Being the primary destination for customers providing value on items they want and need supported by increasingly efficient pickup and delivery, which will drive accelerated growth;
  • Innovating to enhance a seamless, digital customer experience designed to deepen customer relationships and increase share of wallet, enabling the company to diversify the business model by growing related businesses with accretive margins such as marketplace, advertising, financial services and data monetization;
  • In the U.S., the company is continuing to invest to provide more customers with access to high quality, preventative and affordable healthcare to complement its other healthcare offerings, including providing vaccinations across the country and in geographies the federal government defines as medically underserved;
  • Continuing to invest in associates and create opportunities by raising wages for an additional 425,000 frontline associates after raising wages for 165,000 associates last fall;
  • Actively managing the portfolio and deploying capital to priority areas such as capacity and automation in DCs, FCs and market fulfillment centers to accelerate sales and profit growth; and
  • Creating shared value for all stakeholders, including associates, customers, shareholders, business partners, suppliers and the planet.

“We completed a strong year and a strong Q4 thanks to our amazing associates. They stepped up to serve our customers and members exceptionally well during a busy holiday period in the midst of a pandemic,” said Walmart President and CEO Doug McMillon. “Change in retail accelerated in 2020. The capabilities we’ve built in previous years put us ahead, and we’re going to stay ahead. Our business is strong, and we’re making it even stronger with targeted investments to accelerate growth, including raises for 425,000 associates in frontline roles driving the customer experience.”

“This is a time to be even more aggressive because of the opportunity we see in front of us,” said McMillon. “The strategy, team and capabilities are in place. We have momentum with customers, and our financial position is strong.”

“Our associates responded unbelievably to serve customers in one of the most challenging times we’ve faced. We have tremendous momentum having just completed a year with record sales and operating cash flow,” said Walmart CFO Brett Biggs. “We accomplished this while accelerating our long-term strategy of transforming Walmart into a dynamic omnichannel business. It’s now time to accelerate even more.”

Fourth-quarter highlights

  • Total revenue was a record $152.1 billion, an increase of $10.4 billion or 7.3 percent. Excluding currency, total revenue would have increased 7.5 percent to reach $152.3 billion;
  • Walmart U.S. comp sales increased 8.6 percent with strength across most key categories;
  • Walmart U.S. e-commerce sales increased 69 percent with strong results across all channels;
  • Sam’s Club comp sales increased 10.8 percent and e-commerce sales grew 42 percent. Reduced tobacco sales negatively affected comp sales by approximately 410 basis points. Membership income increased 12.9 percent, the strongest growth in six years;
  • Walmart International net sales were $34.9 billion, an increase of 5.5 percent. Net sales in constant currency increased 6.3 percent, led by Flipkart, Mexico and Canada. Changes in currency rates negatively affected net sales by approximately $0.3 billion;
  • Consolidated gross profit rate increased 29 basis points with positive contributions from each operating segment, led by the U.S.;
  • Consolidated operating expenses as a percentage of net sales increased 41 basis points;
  • Incremental expenses related to COVID-19 of approximately $1.1 billion were partially offset by business restructuring charges from the prior year;
  • The decision to repay property tax relief in the U.K. lowered GAAP and Adjusted EPS by $0.07;
  • Consolidated operating income was $5.5 billion, an increase of 3.1 percent;
  • Adjusted operating income in constant currency decreased 3.2 percent, primarily as a result of incremental expenses related to COVID-19 and the company’s decision to repay property tax relief in the U.K;
  • GAAP EPS of ($0.74); Adjusted EPS of $1.39;
  • Adjusted EPS excludes the effects, net of tax, of:
    • a loss on our operations held for sale in the U.K. and Japan of $2.66;
    • net gains of $0.49 on equity investments, primarily JD.com;
    • a benefit from a discrete tax item of $0.10; and
    • a charge related to officer compensation of $0.06.

Fiscal 2021 highlights

  • Total revenue was $559.2 billion, an increase of $35.2 billion or 6.7 percent. Excluding currency, total revenue was $564.2 billion, an increase of $40.2 billion or 7.7 percent;
  • Walmart U.S. comp sales increased 8.6 percent;
  • Walmart U.S. e-commerce sales grew 79 percent. Contribution profit continued to improve;
  • Sam’s Club comp sales increased 11.8 percent. Reduced tobacco sales negatively affected comp sales by approximately 400 basis points. Membership income increased 9.4 percent;
  • Walmart International net sales increased 1.0 percent, or 5.2 percent in constant currency with strength in Mexico, Canada and Flipkart;
  • The company generated $36.1 billion in operating cash flow and returned $8.7 billion to shareholders through dividends and share repurchases; and
  • GAAP EPS of $4.75; Adjusted EPS of $5.48.

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