Despite rapid e-commerce growth, Walmart posted subpar numbers for the busy holiday shopping season, joining a group of retailers that struggled in the shadow of Amazon and its stellar quarter.
Walmart came up short of expectations on both revenue in profits in the fourth quarter of its 2020 fiscal year. The company posted earnings of $1.38 per share on $141.67 billion, compared to analyst expectations of $1.43 per share in profits on $142.49 billion in revenue.
The retail giant’s forecast for this year also came in below expectations, as Walmart expects e-commerce growth to slow. However, Walmart’s stock is still up slightly in pre-market trading.
Walmart joins Target and Kohl’s as major retailers that struggled during the holiday season. In contrast, Amazon, which pushed the shipping envelope yet again with a shift to one-day delivery in 2019, crushed expectations with a record holiday quarter.
Despite record early spending, the holiday season was a challenge for a few reasons, per Walmart executives: fewer shopping days, a lack of big video game releases and a warmer than average winter tamping down demand for warm clothes. Walmart executives also pointed to soft toy sales and unrest in Chile as trends that impacted its numbers in the quarter.
“We started and finished the quarter with momentum, while sales leading up to Christmas in our U.S. stores were a little softer than expected,” Walmart CEO Doug McMillon said in a statement.
The company’s e-commerce growth of 35 percent in the quarter was fueled by Walmart.com’s best quarter of the year and strong results in grocery. Walmart finished the quarter with 3,200 grocery pickup locations, in-store pickup at more than 1,600 locations and more than 1,500 in-store Pickup Towers.
Walmart expects e-commerce growth to slow to 30 percent this year, after the unit saw 37 percent growth in 2019. Walmart doesn’t break out e-commerce numbers, but CNBC reported sales approached $50 billion worldwide for the year. For the year, Walmart posted total revenue of $524 billion, up 1.9 percent over the prior year.