Walmart 2019 Q4 earnings come up short
Updated: Feb 25
On Tuesday, Walmart reported fiscal fourth-quarter earnings that came in weaker than analysts had expected, citing weak demand during the holiday season.
Walmart's outlook for 2020 also fell short of expectations, as the company projects that e-commerce growth will slow. The forecast reportedly does not include any impact from the coronavirus, though the company said it continues to monitor the situation and acknowledged that it could take a hit in China in the first half of 2020. Walmart has 430 locations in China.
Walmart reported a net income for the quarter ending on January 31 of $4.14 billion or $1.45 cents per share, compared with $3.69 billion or $1.27 cents per share a year prior.
"Sales leading up to Christmas in our U.S. stores were a little softer than expected," CEO Doug McMillon said. Regarding the coronavirus, McMillon said, "It's too difficult to tell at this early stage exactly how to forecast it."
Walmart blamed a lack of new games for reduced video game sales and said it lacked the right assortment in apparel for the holiday season. The retailer also cited disruption in Chile as responsible for lowering its operating income by about $110 million.
E-commerce sales during the quarter were up 35%, fueled by grocery sales. Online sales growth for 2019 came in at 37%, beating its own target of 35%.
Sales at Walmart stores and online in the United States were up 1.9% in 2019, falling short of the 2.3% expected growth. Sales at Sam's Club stores grew by just 0.8%, compared with 3.4% growth a year prior.
Walmart is not the only company expecting to take a sales hit because of the coronavirus. Several companies with Chinese-based production expect to struggle at the start of the year, including Under Armour and Apple.