Customers leave a Walmart store on January 24, 2023 in Miami, Florida. Walmart announced it is raising its minimum wage for store employees in early March, store employees will earn between $14 and $19 an hour.

Joe Raedle | Getty Images News | Getty Images

Walmart topped holiday quarter results expectations, which the discounter said attracted budget-conscious shoppers looking for food, gifts and household items at a lower price.

But shares fell in premarket trading after the big-box retailer gave a weaker-than-expected outlook for the year ahead.

The company said it expects same-store sales for Walmart US to increase between 2% and 2.5% excluding fuel in the coming fiscal year. That’s below analysts’ expectations of 3% growth, according to StreetAccount. It expects adjusted earnings per share to range from $5.90 to $6.05, excluding fuel.

Walmart tops expectations for holiday quarter results

Walmart CFO John David Rainey told CNBC shoppers are still buying fewer discretionary items because food prices remain high. He said that took into account Walmart’s projections for the coming year.

“The consumer is still under a lot of pressure,” he said. “And if you look at economic indicators, balance sheets are getting thinner and savings are down relative to previous periods. And so that’s why we’re looking quite cautiously at the rest of the year.”

Home Depot, which also reported financials fourth quarter results on Tuesday morning, also shared a subdued view. It said it expects same-store sales to be roughly flat in the coming fiscal year.

Here’s what Walmart reported for the fourth fiscal year ended Jan. 31, according to Refinitiv’s consensus estimates:

  • Earnings per share: $1.71, adjusted, compared with $1.51 expected
  • Revenue: $164.05 billion vs. $159.72 billion expected

Walmart reported net income of $6.28 billion, or $2.32, up from $3.56 billion, or $1.28, a year earlier.

Revenue of $164 billion was up 7.3% year-over-year.

Same-store sales for Walmart USA increased 8.3%, excluding fuel. The industry key metric that includes sales from stores and clubs that have been open for at least one year. E-commerce sales increased 17% year-over-year for Walmart US

At Sam’s Club, same-store sales were up 12.2%, excluding fuel.

The company is not only the country’s largest retailer. It’s also a powerhouse for grocery stores, a factor that has stabilized sales and driven foot traffic as Americans watch budgets due to high inflation.

Walmart’s reputation for value has helped the retailer — as has its big grocery store. It is the largest grocery store in the country by revenue. The prices of these food items have attracted new customers across income levels.

During the holiday quarter, Walmart’s stock gains also came from lower- and middle-income customers

Walmart has made progress with a headache that has plagued many retailers: A lot of unsold goods that piled up in the store’s back room and ended up on clearance racks. Inventory is roughly unchanged from a year ago, Rainey said, and was down 3% for Walmart US

Shares of Walmart closed Friday at $146.44, giving the company a market capitalization of nearly $395 billion. The company’s shares are up about 3% so far this year, underperforming the S&P 500’s gain of about 6% over the same period.

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