Walmart Falls Short of Expectations in Q4 Report as Company Stock Dips in Pre-Market Trading

By Thomas Price Thursday, February 18, 2021

Following a year of massive ecommerce growth in replacement of in-person retail shopping, Walmart fell slightly short of Wall Street expectations in its Q4 report, as ecommerce sales growth dropped lower than many had hoped. Severe losses in the United Kingdom (UK) and Japan only further dampened several positive notes that the business had in other regions as well. As a result, the company has seen shares drop significantly in pre-market trading, especially as 2021 guidance from the business failed to alleviate anxieties.

Walmart store entrance.

Q4 Report Shows Walmart Against Wall Street Expectations

In Walmart’s Q4 earnings report, the company posted higher than expected incomes but fell short in terms of profits. In fact, the company reported $152.1 billion in total revenue, translating to a 7.3% growth in comparison to 2019. This number also beat out analyst projections which had the business only earning $148.3 billion. At the same time, the company also reported an increase of same-store sales of 8.6%, also beating out expectations which had Walmart’s growth at only 5.8% in this sector.

The major disappointments for the business came from the slowed rate of ecommerce growth and losses in the quarter. While ecommerce business and sales grew by an impressive 69%, despite the strong numbers, this is the slowest growth rate for the company since the onset of the pandemic. The slowed growth is especially worrisome considering that Walmart has yet to turn a profit on any of its ecommerce sales, though margins are beginning to improve.

Additionally, Walmart reported a loss of $2.09 billion or $0.74 per share, a major difference from 2019 which resulted in strong earnings across the board. The company puts the majority of responsibility for this on the major losses taken in the UK and Japan, where business was hurt the worst by restrictions and lack of in-person foot traffic.

Walmart 2021— Outlook and Stock Market Response

Following the Q4 earnings report, the company also released guidance for the upcoming fiscal year. While income and business do look to continue to grow, the rate of growth is slowed in comparison to what many investors were hoping for. At the same time, the business also expects earnings per share for the year to be slightly lower than the prior fiscal year. All of these factors have resulted in the business seeing its stock drop by over 5%, or over $8 per share, in pre-market trading.

In a statement released with the Q4 report, Walmart President and CEO Doug McMillan said, “Change in retail accelerated in 2020. The capabilities we’ve built in previous years put us ahead, and we’re going to stay ahead. Our business is strong, and we’re making it even stronger with targeted investments to accelerate growth, including raises for 425,000 associates in frontline roles driving the customer experience.”

About the Author

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Tom Price is a writer focusing on entertainment and sports features. He has a degree from NYU in English with a minor in Creative Writing. He has been previously published for Washington Square News, Dignitas, CBR, and Numbers on the Boards.

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