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Walmart downplays deflation as it surges forward

Bolstered by grocery retailer produces strong fourth quarter and anticipates more growth

Bill Wilson, Senior editor at Supermarket News

February 20, 2024

2 Min Read
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In the U.S., fourth quarter net sales were up 3.4% (5.7% including international) year over year at $117.6 billion ($173.4 billion including international).Getty Images

While taking a step back on its deflation prediction, Walmart continues to thrive whatever the economic conditions are as the retailer revealed a glowing fourth quarter earnings report. 

Last year, CEO Doug McMillon said he expected prices on goods to retract in 2024. On Tuesday, Chief Financial Officer John David Rainey told CNBC prices should continue to stabilize in the coming months, but are showing no signs of going down. 

Rainey also said shoppers are buying less when they are at the store yet trips are becoming more frequent, which may explain why the Bentonville, Ark.-based retailer is showing no signs of weakening. 

In the U.S., fourth quarter net sales were up 3.4% (5.7% including international) year over year at $117.6 billion ($173.4 billion including international). Comparable sales excluding fuel and transactions increased 4% and 4.3%, respectively, but average ticket sales went down 0.3% as more shoppers continued to buy less non-essential goods like electronics. Meanwhile, grocery and health and beauty items continued to bolster Walmart’s business. 

Led by the strength of pickup and delivery, Walmart experienced a 17% year-over-year bump in ecommerce sales during the fourth quarter, and Walmart Connect advertising sales grew 22%. 

Related:Walmart should continue to lead the pharmacy sector: report

Inventory declined 4.5% with higher in-stock levels. 

Sam’s Club U.S. sales in the fourth quarter were up 2% year over year at $21.9 billion and net sales excluding fuel increased 3.3% at $19.4 billion. Transactions saw an increase of 3.6% while the average ticket went down 0.4%. 

Sam’s Club gained dollar and unit market share in Q4 and ecommerce sales were up 17%. Membership income was up 10% year over year. 

“Our team delivered a great quarter, finishing off a strong year,” said McMillon during the earnings call on Tuesday. “We crossed $100 billion in ecommerce sales and drove share gains as our customer experience metrics improved, even during our highest volume days leading up to the holidays.”

The momentum does not appear to be slowing down for Walmart, as the retailer is forecasting a 4% to 5% increase in consolidated net sales during the first quarter. For fiscal year 2025, growth is expected to come at a 3% to 4% rate. 

 

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About the Author

Bill Wilson

Senior editor at Supermarket News

Bill Wilson is the senior editor at Supermarket News, covering all things grocery and retail. He has been a journalist in the B2B industry for 25 years. He has received two Robert F. Boger awards for his work as a journalist in the infrastructure industry and has over 25 editorial awards total in his career. He graduated cum laude from Southern Illinois University at Carbondale with a major in broadcast communications.

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