Walmart turns in strong U.S. performance for fiscal 2022

Walmart posted robust sales gains in its U.S. businesses for its 2022 fourth quarter and fiscal year, topping Wall Street’s earnings forecast despite a revenue impact from international divestitures.

In the fourth quarter ended Jan. 31, Walmart saw total revenue edge up 0.5% to $152.87 billion from $152.08 billion a year earlier, the Bentonville, Ark.-based retail giant said Thursday. In constant currency, revenue was up 0.6% to $153.03 billion.

Full-year 2022 revenue came in at $572.75 billion, up 2.4% from $559.15 billion in fiscal 2021, Walmart said. Revenue in constant currency totaled $568.19 billion, an increase of 1.6%. The company noted that its revenue reflects negative impacts of $10.2 billion in the fourth quarter and $32.7 billion for the year from overseas divestitures. Those include transactions in the United Kingdom, Japan, Argentina and Brazil.

“Our team delivered net sales growth of 7.6% and adjusted EPS growth of 9.3% excluding divestitures. We continued to gain market share in food and consumables in the U.S., and comp transactions were positive. Consumer demand during the quarter was strong, and the team overcame a number of challenges in the U.S. and around the world to deliver these strong results,” Walmart President and CEO Doug McMillon told analysts in a conference call on Thursday. “Going into the quarter, we were confident that we had the people, the products and the prices to deliver, and we did. Our inventory position improved, and we delivered high sell-throughs in seasonal categories across markets. Food, consumables and apparel were also strong globally.”

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President and CEO Doug McMillon said that Walmart's revenue grew 17% and its percentage of digital sales expanded from 6% to 13% from the start of fiscal 2021 to the end of fiscal 2022.

At Walmart U.S., 2022 fourth-quarter net sales advanced 5.7% to $105.28 billion from $99.59 billion a year ago, including market share gains in grocery, the company said. Comparable-store sales rose 6% (5.6% excluding fuel). The average ticket size expanded 2.4%, while the transaction count increased 3.1%, which followed a 10.9% drop in the prior-year period.

Overall fiscal 2022 net sales at Walmart U.S. climbed 6.3% $393.25 billion from $369.96 billion in 2021. Comp-store sales grew 6.8% and were up 6.4% excluding fuel, with the gain at 15% over two years.

“The team had a great holiday season. They drove comp sales of 5.6%,” McMillon said. “You know about our strength in food and consumables, but despite the supply chain challenges, the seasonal hardlines execution for holiday looked good in stores. We’re continuing to navigate cost pressures and in-stock challenges, but overall I’m really proud of the team for delivering in the holiday season. And I believe we’ll work our way to an improved in-stock level through the course of the year.”

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Walmart Chief Financial Officer Brett Biggs pointed out that the 2022 fourth quarter marked the first-ever $100 billion-plus sales quarter for Walmart U.S.

“We continue to grow grocery market share as food comps increased high single digits, while health and wellness, apparel, seasonal and automotive categories were also strong,” Biggs told analysts. “We continue to see elevated levels of cost inflation and have taken prudent steps to manage pricing while having slightly wider price gaps than pre-pandemic,” he added. “We have a good balance of growing market share while managing price, with both customers and shareholders in mind.”

On the e-commerce side, Walmart U.S. posted fourth-quarter online sales growth of 1% year over year at the top line and 0.8% on a comparable basis, with the two-year comp-sales stack showing a 70% increase. For all of fiscal 2022, e-commerce sales rose 11% and were up 90% over two years.

“Building a seamless omnichannel experience for customers and prioritizing convenience for them is critical,” McMillon noted in the call. “Our stores have become hybrid; they’re both stores and fulfillment centers. Last year, we increased the number of orders coming from our stores by 170% versus the previous year, and that’s on top of more than 500% from the year before. Having inventory so close to so many customers is a competitive advantage. In some cases, we’re getting items to customers in hours rather than days.”

Sam’s Club recorded even stronger growth than Walmart U.S. Fourth-quarter 2022 sales at the warehouse club subsidiary jumped 16.5% to $19.25 billion from $16.53 billion a year ago. Comparable-club sales increased 16.3% (10.4% without fuel) and were up 21.2% on a two-year stack. Transaction count climbed 7%, while ticket size grew 3.2%. E-commerce sales rose 21% at the top line and 1% on a comparable basis.

“Sam’s Club had another impressive quarter, with comps up 10.8% excluding fuel and tobacco, an increase of 26% on a two-year stack,” Biggs explained. “E-commerce sales grew 21%, and we expanded the rollout of delivery capabilities of digital orders to nearly all clubs during the quarter. Sam’s is leveraging Walmart’s GoLocal last-mile delivery service to provide more convenience to members. Membership income was up more than 9%, another record in member counts and strong Plus [membership] penetration.”

For fiscal 2022, Sam’s Club tallied net sales of $73.56 billion, up 15.1% from $63.91 billion in 2021. Comp sales surged 15.3% year over year and, excluding fuel, were up 9.8%, with the two-year increase at 21.6%. The company didn’t report Sam’s e-commerce sales growth for the full year. Membership income rose 11.3%.

“Sam’s continues to drive digital innovation and add capabilities,” according to McMillon. “Our Bold and Blue club remodels and our strengthened pickup and delivery services will drive growth.”

Walmart International’s net sales fell 22.6% to just under $27 billion in the fourth quarter. In constant currency, net sales were down 22.1% to $27.15 billion. Fiscal 2022 international net sales decreased 16.8% to $100.96 billon and, in constant currency, were down 20.5% to $96.46 billion, Walmart reported.

At the bottom line, Walmart posted fiscal 2022 fourth-quarter GAAP consolidated net income of $3.56 billion, or $1.28 per diluted share, compared with a net loss of $2.09 billion, or 74 cents per diluted share, a year ealier. Consolidated net earnings for fiscal 2022 on a GAAP basis came in at $13.671 billion, or $4.87 per diluted share, versus $13.51 billion, or $4.75 per diluted share, in 2021.

In the fourth quarter, Walmart saw high-single-digit comp-sales growth in grocery.

Walmart said adjusted net earnings per share were $1.53 in the fiscal 2022 fourth quarter, compared with $1.39 a year ago. Analysts, on average, had projected fourth-quarter adjusted EPS of $1.50, with estimates ranging from a low of $1.45 to a high of $1.59, according to Refinitiv.

Wall Street’s consensus fiscal 2022 forecast was for adjusted EPS of $6.42, with projections running from a low of $6.36 to a high of $6.51. On an adjusted basis, Walmart reported full-year EPS of $6.46 compared with $5.48 in 2021.

“Sometimes it feels like 2020 and 2021 were just one long year. If you look at growth since the beginning of fiscal 2021 through the end of fiscal 2022, excluding divestitures, our company is about 17% larger in terms of revenue, 31% larger in terms of operating income, and globally our percentage of digital sales grew from 6% to 13%,” McMillon said in the analyst call, reporting that Walmart expanded e-commerce capacity by 20% last year and aims to do so by 35% this year.

“Ensuring that we deliver our strategy is where I invest the majority of my time,” he said. “It starts with a customer and earning primary destination. The big basket stockup trip is important; it’s foundational to our relationship with families. We earn that shopping occasion by running great stores and clubs and offering seamless pickup and delivery experiences, including for our Walmart and InHome members in the U.S.”

Walmart finished fiscal 2022 with 10,566 stores overall, including 4,742 Walmart U.S., 600 Sam’s Club and 5,224 international locations. The company had closed out fiscal 2021 with 11,443 stores worldwide, with 4,743 Walmart U.S., 599 Sam’s Club and 6,101 international locations.