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Business

Walmart (WMT) earnings Q4 2021 miss expectations

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Walmart’s fourth-quarter earnings felt short of Wall Street’s expectations on Thursday, as the retailer aims to turn the strength of its e-commerce business during the pandemic into lasting momentum and higher profits.

Shares are down nearly 5% in premarket trading.

The discounter’s e-commerce sales in the U.S. grew by 69% — a large number, but the slowest growth rate since the start of the global health crisis. Same-store sales in the U.S. grew by 8.6%, higher than the increase of 5.8% expected by a StreetAccount survey. Its subsidiary, Sam’s Club, also reported low single-digit same-store sales growth, excluding fuel and tobacco.

Walmart, however, cautioned that it expects sales to moderate this year. It said earnings per share will decline slightly, but be flat to higher after excluding divestitures. The company’s tailwinds from pandemic trends may also fade, as more Americans get Covid-19 vaccines and spend their budget in other ways, such as going out to dinner or filling up the gas tank on a commute back to the office.

Walmart CEO Doug McMillon said that the company has stepped up investments to keep up with the significant ways that retail has changed over the past year. He said it will also boost the wage of U.S. workers, raising the average for hourly employees to above $15 per hour. 

“This is a time to be even more aggressive because of the opportunity we see in front of us,” he said in a news release. “The strategy, team and capabilities are in place. We have momentum with customers, and our financial position is strong.”

Walmart swung to a loss of $2.09 billion, or 74 cents per share, from earnings of  $4.14 billion, or $1.45 share, a year earlier. The company said a loss on its U.K. and Japanese operations reduced earnings by $2.66 per share, which was partially offset by a gain of 49 cents per share on equity investments.

Excluding these and other items, Walmart earned $1.39 per share, missing analysts estimates. 

Walmart’s e-commerce business has had dramatic gains, but it has not yet turned a profit. The company’s Chief Financial Officer Brett Biggs told CNBC that its e-commerce margins continue to improve, however.

He said Walmart plans to spend $14 billion on capital expenditures this fiscal year, up from a rate of $10 billion to $11 billion as it invests in supply chain, automation and ways to improve the customer experience.

Total revenue grew by 7.3% to $152.1 billion from $141.67 billion a year earlier, topping Wall Street’s expectations of $148.30 billion.

Its membership warehouse club, Sam’s Club, reported same-store sales grew by 8.5% excluding fuel and tobacco. The membership warehouse club’s e-commerce sales jumped by 42%.

Walmart is raising its dividend by a penny to 55 cents per share and approved a $20 billion stock buyback program.

This story is developing and will be updated.

Read the full press release here.

—CNBC’s Courtney Reagan contributed to this report.

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Business

Walmart closes 415 stores, Amazon shuts down delivery stations as businesses confront tough weather

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Walmart closed 415 stores and Sam’s Clubs and put together an interactive map to help Texas shoppers determine if their neighborhood location was open or not.

And if you didn’t see Amazon delivery trucks in your neighborhood Monday, the online retailing giant closed its delivery stations in Dallas-Fort Worth to protect its drivers from navigating treacherous roadways.

Businesses faced with unprecedented nasty weather across Texas, and elsewhere around the southern U.S., had to decide Monday if worker safety outweighed expectations that they’d be open for customers needing food and other essentials.

“We assess the status of our facilities and will continue to operate as long as it is safe to do so,” Walmart said in a statement. Its closings spanned 10 states, including Texas.

Walmart recommended customers check an interactive map it’s continuing to update before venturing out. Some closed stores continued to operate curbside pickup and delivery.

The prospects of a second snowstorm makes decisions trickier during what’s shaping up to be a week of sub-freezing temperatures.

“The safety and well-being of our employees, customers and the drivers who deliver packages are our No. 1 priority,” said Amazon spokesman Daniel Martin.

Amazon will continue monitoring the storm’s effects in Texas, and directed customers to check order status on its app or amazon.com. Martin said Amazon will continue to take orders, but the delivery promise date may be delayed depending on the item and location.

Grocery stores, one of the main stops for people riding out the storm, were open Monday but planned to close early.

Kroger, which usually keeps stores open until 1 a.m., was closing its doors at 8 p.m. Central Market’s Dallas-Fort Worth stores were shutting down at 6 p.m. Kroger will reopen stores at 8 a.m. Tuesday, two hours later than usual.

Empty shelves and freezer cases, reminiscent of the early days of the pandemic, are temporarily back at grocery stores.

Deliveries from the warehouse to stores took place Monday at a much slower pace, said April Martin, spokeswoman for Kroger. Most big chains have their own truck fleets but supplement with third-party drivers and vehicles.

Kroger’s backup generators also weren’t working in many locations due to the rolling blackouts, Martin said.

Tom Thumb and Albertsons stores were closing at 5:30 p.m. on Monday, said spokeswoman Christy Lara. The plan is for stores to open at 8 a.m. Tuesday, “if it’s safe for associates and customers,” she said. Some Tom Thumb and Albertsons stores weren’t able to open on Monday due to power outages.

Target closed 20 stores across Texas on Monday and closed early at about 20 other locations in Texas, Alabama, Arkansas and Mississippi. Stores will reopen “as soon as it’s safe,” the retailer said in an email. It’s updating hours on Target.com.

Dallas’ two main malls were closed Monday. NorthPark Center did not open. Galleria Dallas initially told shoppers to call individual stores before the mall shut down around noon.

Golden Triangle Mall in Denton also closed, along with Stonebriar Centre in Frisco and Firewheel Town Center in Garland.

It wasn’t just retail feeling the storm’s impact.

Bell closed its Fort Worth-area facilities, beginning with its 11 p.m. shift Sunday, and they’ll remain closed until 11 p.m. Tuesday. Bell designs and makes helicopters and autonomous delivery pods and works with Lockheed Martin on the V-280 Valor, a tiltrotor aircraft built for the U.S. Army.

Downtown Dallas Inc. CEO Kourtny Garrett said many of the central business district’s hotels, including The National and the Omni, were open and at least a couple restaurants were operating. The Flying Horse Café and the Crafty Irishman put their employees up in hotels.

Hotels also were helping to house first responders. Dallas Police Department staff were staying at the Lorenzo Hotel. And Garrett said most of the calls from downtown’s 12,000 residents were to report homeless people without shelter.

As far as electricity, Garrett said downtown towers were asked to turn off their lights. Reunion Tower confirmed that its signature skytop ball of lights would go dark Monday night. AT&T and its new Discovery District will also go dark, a spokesperson confirmed.

It’s not clear how much energy savings the city’s skyscrapers can generate, she said, but Downtown Dallas Inc. asked for nonessential lights to be turned off to assist the state’s stretched power grid.

Twitter: @MariaHalkias

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Business

12 Walmart stores in N.J. ready to give COVID vaccinations, company says

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Residents searching for a coronavirus vaccination will soon have 12 Walmart and Sam’s Club stores to choose from, the company says.

When the company gets the vaccine, in conjunction with New Jersey health authorities, the retail giant will join six mega centers and 200 other locations in the state.

The Walmart sites could help, after New Jersey has faced criticism for having a slower rollout than dozens of other states as it continues to deal with a second wave of the pandemic, according to data from the federal Centers for Disease Control and Prevention (CDC).

The announcement is part of Walmart’s “expanding efforts at the state’s request in administering the COVID-19 vaccine to state-designated priority groups,” Alexa Cangialosi, a Walmart spokeswoman, said in a statement

“So far, we have an estimated 100 stores and Sam’s Clubs across more than half a dozen states administering vaccines to those the state has deemed eligible, including here in New Jersey,” she said.

Stores and clubs in the following locations are preparing to administer vaccinations to priority populations: Pleasantville, Toms River, North Brunswick, Burlington Township, Pennsville, Franklin, Garfield, Hamilton, Vineland, Linden, North Bergen and Boonton.

Currently, shots are available for health care workers, long-term care residents and others in congregant living, and police and firefighters. Also included are anyone 65 or older and those between 16 and 64 with specific medical conditions – including smokers.

Nearly every site in the state has asked people to pre-register through the state’s website. Many have reported getting appointment times several weeks away.

The announcement comes as the state reported 4.613 more coronavirus cases and 17 deaths on Sunday. It was the same day the state Department of Health issued new predictive models that showed Sunday could be the peak of the state’s second wave of the pandemic.

Whether that bump happens could depend on how quickly New Jersey receives and distributes vaccine doses. Gov. Phil Murphy has said he wants to have 70% of the state’s eligible population — nearly 5 million people — vaccinated by May.

Walmart also has a website and a store locator dedicated to the vaccine.

At full capacity, the company expects to be able to deliver 10 to 13 million doses per month nationally when supply and allocations allow, Walmart officials said in a statement.

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Larry Higgs may be reached at lhiggs@njadvancemedia.com.

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