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Walmart (WMT) reports Q4 fiscal 2020 earnings

Walmart reported fiscal fourth-quarter earnings fell short of analysts’ estimates, as the retailer saw weak demand for toys, apparel and video games during the holiday season.

Its outlook for the upcoming year also came up short of expectations, as Walmart anticipates e-commerce growth will slow. Walmart said the forecast doesn’t include any impact from the deadly coronavirus outbreak.

Political unrest in Chile, where protests have caused disruption in Walmart stores in the region, also weighed on its results in the latest quarter.

Walmart shares fell less than 1% in premarket trading Tuesday on the news.

Here’s what the company reported compared with what analysts were expecting for Walmart’s fiscal fourth quarter, based on Refinitiv data:

  • Earnings per share: $1.38, adjusted, vs. $1.43 expected
  • Revenue: $141.67 billion vs. $142.49 billion expected
  • Same-store sales: up 1.9% in the U.S. vs. growth of 2.3% expected

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

Walmart reported net income for the quarter ended Jan. 31 of $4.14 billion, or $1.45 cents a share, compared with $3.69 billion, or $1.27, a year ago. Excluding one-time items, Walmart earned $1.38 a share, short of expectations for $1.43 per share, according to a poll by Refinitiv.

It said disruption in Chile lowered its operating income by roughly $110 million.

Revenue grew about 2.1% to $141.67 billion from $138.79 billion a year ago. But that was short of estimates for $142.49 billion.

Sales at Walmart stores in the U.S. open for at least 12 months, and its website, were up 1.9%, short of expectations for 2.3%.

Transactions at Walmart stores in the U.S. were up 1% during the quarter, down from growth of 1.5% a year ago. The average ticket was up just 0.9%, Walmart said, compared with ticket growth of 2.6% a year ago.

E-commerce sales during the quarter were up 35%, fueled by its best growth yet for Walmart.com. For the year, Walmart reported online sales growth of 37%, topping its own internal growth targets of 35%.

For fiscal 2021, Walmart expects that growth to slow, with an expectation e-commerce sales will rise roughly 30%.

It said earnings are expected to fall within a range of $5.00 to $5.15 a share. Analysts had been calling for annual earnings of $5.22 per share.

Walmart announced the results ahead of the company holding a meeting with investors in New York.

Wall Street has been eager to see how Walmart fared this holiday season.

Rival Target‘s holiday sales results disappointed, with Target citing weakness in toys, leading many to believe Walmart’s results would be similarly less upbeat.

As Walmart’s grocery business has been on fire, its e-commerce operations have been more mixed. And some of its bets have failed.

Just last week, Walmart said it would be discontinuing its text-to-order e-commerce service, known as Jetblack. It launched the business in New York back in 2018. But it hasn’t been able to make money on the project, nor grow the audience at scale, according to reporting by The Wall Street Journal. Instead, Walmart said it plans to incorporate some of Jetblack’s technology into its own business.

It sold ModCloth, a clothing start-up it had previously acquired in a bid to grow the reach of its audience, last year. Another one of its acquisitions, Bonobos, laid off employees last year. And Bonobos founder Andy Dunn late last year announced his departure from Walmart. Dunn had been tasked with helping the head of Walmart’s U.S. e-commerce business, Marc Lore, acquire digital brands.

There has also been ample shake-up among Walmart’s executive ranks of late.

Last month, it said its chief merchant Steve Bratspies would be departing. That news came after the chief merchant for Walmart’s U.S. e-commerce business, Ashley Buchanan, left in December to become CEO of crafts retailer Michael’s. And last summer, Walmart integrated many Jet.com positions into its own business, eliminating the Jet.com president role.

Walmart shares are up about 19% over the past 12 months. It has a market value of roughly $332.7 billion.

Read the full press release here.

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