Walmart reports the biggest December in its history

Walmart on Tuesday reported a stronger-than-expected holiday season—including the best December sales in its 60-year history—and said it continues to gain market share in grocery. But the retail giant’s forecast for the coming year is less certain.

For the quarter ended Jan. 27, Walmart’s U.S. same-store sales rose 8.3%, or 13.9% on a two-year stacked basis. The retailer’s e-commerce sales grew 17% during the fourth quarter and total revenue climbed 7.3%, to $164 billion.

For fiscal 2024, however, Bentonville, Arkansas-based Walmart predicts same-store sales growth of just 2% to 2.5%.

December was the biggest sales month in Walmart’s history, CFO John David Rainey said during a call with analysts early Tuesday.

Walmart, the country’s largest grocery retailer, said food sales grew in the “high teens” (up from mid-teens grocery growth during Q3) during the fourth quarter. Private-label penetration soared more than 160 basis points.

Rainey said Walmart is seeing “improved attachment rates” among shoppers who pick up other merchandise with their groceries.

Nevertheless, the retailer said it would take a “cautious” approach to its fiscal 2024 forecast.

“There’s a great deal of uncertainty looking out over the balance of the year,” Rainey told analysts. “Prices are still high, and there is considerable pressure on the consumer. Our guidance reflects a cautious outlook.”

Walmart-owned warehouse retailer Sam’s Club had another big quarter, reporting record membership numbers and same-store sales growth of 12.2%, or 22.6% on a two-year stack. Membership income rose 7.1%. It’s the third consecutive year of double-digit same-store sales growth at Sam’s Club.

Walmart’s same-store sales growth during the fourth quarter was driven by a 6.3% jump in average ticket (due in part to inflation, the company said) and 1.8% growth in transactions. At Sam’s Club, transactions increased 6.7% during the quarter, while average ticket was up 5.2%.

The retailer had previously announced plans to open 30 new Sam’s Club stores around the country over the next several years.

Walmart’s margins during Q4, however, fell 83 basis points, due to additional markdowns, mix headwinds and inflation.

Advertising continues to play a more significant part in Walmart’s balance sheet. During the fourth quarter, the retailer’s global ad business grew more than 20%, driven by 41% growth in the U.S.-based Walmart Connect platform. For the full-year, global ad sales reached $2.7 billion.

E-commerce sales were up 12% for the full year, or 23% on a two-year stack.

“E-commerce is an $80 billion business and still growing,” Rainey said. “We’ve always been known for price but we’re also being known for convenience.”

Globally, Walmart operates more than 10,500 stores in 20 countries. About half of those are in the U.S.