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Walmart Misses Earnings Forecast, 2021 Profit Outlook Below Estimates

Walmart reports weaker-than-expected fiscal fourth-quarter earnings amid a shorter-than-usual holiday shopping season, and issues a fiscal 2021 earnings outlook below  analysts' estimates.

Big-box retail heavyweight Walmart  (WMT) - Get Free Report on Tuesday reported weaker-than-expected fiscal fourth-quarter earnings amid a shorter-than-usual holiday shopping season that ate into both sales and net income, and issued a fiscal 2021 earnings outlook below analysts' estimates that it says will be partially impacted by the coronavirus outbreak.

Walmart said earnings for the three months ended January came in $4.14 billion, or $1.45 a share vs. earnings of $3.69 billion, or $1.27 a share, in the comparable year-earlier quarter. However, on an adjusted basis, the company earned $1.38 a share, less than the $1.44 a share expected by analysts polled by FactSet.

Sales were $141.67 billion, up from $138.8 billion a year ago but below analysts' estimates of $142.5 billion.

Walmart Q4 Earnings graphic

Same-store sales, a key metric that measures how often and how much consumers make repeat trips to buy goods, rose 1.9% in the U.S., the company said, below Wall Street estimates of a 2.3% gain. 

E-commerce sales, a now-critical measurement of retailers’ overall sales, gained 35%, the company said. For the year, Walmart reported online sales growth of 37%. 

The 2019 holiday season had six fewer shopping days than usual, which analysts warned before Walmart's earnings likely put pressure on overall retail sales.

“In the few weeks before Christmas, we experienced some softness in a few general merchandise categories in our U.S. stores," Chief Financial Officer Brett Biggs said in a statement, noting the company also experienced softness in some key international markets, as well as in Chile, "... where unrest led to disruption in the majority of our stores." 

"“The holiday season … wasn’t as good as expected due to lower sales volumes and some pressure related to associate scheduling," Biggs also said.

The company said it expects fiscal 2021 earnings of $5 to $5.15 a share, below Wall Street forecasts of $5.21. Walmart announced its results ahead of the company holding a meeting with investors in New York.

Executives on the company's post-earnings conference call said they  expect a "couple of cents" of negative impact on the company's fiscal first quarter due to the outbreak of COVID-19, which has impacted sales in the Far East, though the company is not officially factoring the coronavirus into its forecast for the new year. 

What Walmart and other large U,S, retailers are looking to factor into their upcoming forecasts and numbers is a recovery from a mediocre holiday shopping season. 

Target  (TGT) - Get Free Report last month reported comparable same-store sales over the holiday shopping season that came in a tad lighter than expected

The retailer also warned that growth for the full quarter, which includes January, will likely come in less than half the 3% to 4% growth it had been expecting.

Separately, Walmart's board said it approved raising the company's annual dividend to $2.16 a share, up from the $2.12 it paid in the last fiscal year. The fiscal year 2021 annual dividend will be paid in four quarterly instalments of 54 cents. The first payment date will be April 6, for shareholders of record as of March 20.

Investors generally shrugged off the disappointing numbers, with shares of Walmart down slightly at $117.57 in morning trading on Tuesday.