Amid ‘Persistent Inflation’ in Grocery Aisle, Walmart Continues to Attract High-Income Shoppers

Walmart reported Q4 fiscal 2023 results that beat Wall Street estimates, with revenue of $164.05B and adjusted earnings per share of $1.71. Despite this, the Bentonville-based retailer’s updated fiscal 2024 outlook for its U.S. businesses came in lower than analysts’ expectations, causing shares to drop more than 2% at market open before recovering.

Walmart’s net sales for Q4 increased 7.4% to $162.7B, with sales boosted by strength in food categories, private brand sales, and higher ticket and store transactions. December 2022 saw the largest sales volume in the retailer’s history, while Walmart U.S. net sales were 8.0% higher year-over-year, led by continued strong market share gains in grocery, including high-income households.

Additionally, Walmart’s e-commerce sales saw strong growth during the fourth quarter, increasing by 10% year-over-year. This growth was primarily driven by the company’s investments in online grocery, which saw triple-digit growth during the quarter. The company also reported that its marketplace business continued to perform well, with strong growth in both first-party and third-party sales.

Walmart’s international business also showed positive results, with net sales up 4.8% on a constant currency basis. The company’s operations in Mexico, China, and Canada all reported strong sales growth, while sales in the United Kingdom were impacted by ongoing COVID-19 restrictions.

Looking ahead, Walmart’s management provided a cautious outlook for fiscal 2024, noting that the ongoing COVID-19 pandemic and inflationary pressures continue to create uncertainty for the business. The company expects net sales growth to slow in the coming year, with growth in the mid-single digits, while earnings per share are expected to be flat or slightly down compared to fiscal 2023.

In conclusion, Walmart’s strong Q4 results show that the company continues to benefit from its focus on grocery and e-commerce, as well as its ability to attract higher-income shoppers. However, inflationary pressures and ongoing COVID-19 uncertainties pose challenges for the company going forward. Walmart’s management will need to remain agile and responsive in order to navigate these challenges and continue delivering value to customers and shareholders alike.

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