NEW YORK: Walmart reported on Thursday strong fourth-quarter sales amid the upheaval of the coronavirus pandemic, but shares fell sharply as it announced costly investments on technology and higher wages.
The retail giant reported a fourth-quarter loss of $2.1 billion from the accounting for asset sales, compared with profits of $4.1 billion in the year-ago period. Revenues rose 7.3 per cent to $152.1 billion.
Shares fell about five per cent after the company announced it was spending more on technology and wage hikes for some workers.
Walmart Inc beat expectations for same-store sales growth as an early start to the holiday season and a boost from stimulus money late in the fourth quarter drove demand for electronics, toys and groceries.
Walmart, which employs 1.5 million people in the United States, also said it was raising wages for its workers in the country to more than $15 per hour on average.
Sales at US stores open at least a year surged 8.6 per cent, excluding fuel, in the three months ended January 31, well above analysts’ expectations of a 5.6 per cent rise, according to IBES data from Refinitiv.
Online sales rose 69 per cent in the quarter, blowing past a 35 per cent increase in the year-earlier period, but slower than a 79 per cent surge in the third quarter.
The retailer has relied on its scale and strengthening online presence during the pandemic to attract new customers looking for a one-stop shop for their daily needs.
Operating income rose 3.1 per cent to $5.49 billion in the quarter, while adjusted earnings were $1.39 per share. Analysts on average were expecting the company to earn $1.51 per share.
Walmart said it had incurred about $1.1 billion in expenses related to Covid-19 in the reported quarter, including higher wages for warehouse workers, bonuses for store employees and costs related to keeping its stores clean.
It forecast fiscal 2022 net sales to grow in low-single digits, with earnings per share estimated to be flat to slightly up.
Shares of the company were down about 2 per cent in premarket trading. — Reuters
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