UPDATE: Wal-Mart’s Q4 2012 earnings release is out.Earnings per share came in at $1.67, higher than estimates of $1.57.
Revenues came in at $127.1 billion, a bit less than expected.
Wal-Mart offered guidance for first-quarter earnings in a range of $1.11 to $1.16 per share, lower than analysts’ consensus estimate of $1.19.
The company also hiked its 2014 full-year dividend 18 per cent.
While leaked emails circulated among Wal-Mart executives describing February sales figures as a “total disaster” blamed payroll tax hikes as the main culprit, the company today said the slow start was largely due to delayed tax refunds.
This still translates to weak first-quarter guidance, though. The release states, “Due to the slower sales rate in the first few weeks of this year’s first quarter, we are forecasting comp sales for the 13-week period from Jan. 26 to Apr. 26, 2013 to be around flat.”
Flat guidance compares with analysts’ consensus estimate for around 1 per cent sales growth in the first quarter, according to CNBC,
The stock is moving higher in pre-market trading.
Below are highlights from the release:
- Wal-Mart Stores, Inc. (Walmart) reported fiscal year 2013 fourth quarter diluted earnings per share from continuing operations (EPS) of $1.67, a 10.6 per cent increase compared to last year. Full year EPS were $5.02, also a 10.6 per cent increase over last year. The company’s quarter and full year performance benefited from a lower than expected effective tax rate. Last year’s fourth quarter EPS were $1.51.
- The company announced its annual fiscal year 2014 dividend of $1.88 per share, an 18 per cent increase or $0.29 per share, over last year’s dividend of $1.59 per share. [Note: Please see separate release on dividend dated Feb. 21, 2013.]
- Walmart U.S. added more than $10 billion in net sales during fiscal year 2013, including approximately $4.7 billion in comp sales. For the fourth quarter, Walmart U.S. reported a 1.0 per cent comp sales increase. Walmart U.S. gained market share1 in “food, consumables, health & wellness/OTC,” as well as the entertainment categories and toys.
- Walmart International grew net sales 7.4 per cent to $135.2 billion for the year. On a constant currency basis2, net sales would have increased 7.8 per cent to $135.7 billion.
- Consolidated net sales reached $466.1 billion for the year, an increase of more than $22 billion, or growth of 5.0 per cent.
- All three operating segments and the total company leveraged operating expenses for the year.
- Consolidated operating income was $27.8 billion for the full year, an increase of 4.7 per cent over last year.
- Walmart reported strong free cash flow2 of $12.7 billion for the 12 months ended Jan. 31, 2013, an 18.1 per cent increase over last year.
- Return on investment2 (ROI) for fiscal year ended Jan. 31, 2013 was 18.2 per cent.
- The company returned $13.0 billion to shareholders through dividends and share repurchases during fiscal year 2013.
Below is the section on comparable sales figures:
During the 13-week period, the Walmart U.S. comp was driven by an increase in average ticket of 1.1 per cent, and a traffic decline of 10 basis points. According to the Nielsen Company, we gained 40 basis points of market share1 in the measured category of “food, consumables and health & wellness/OTC” during the 13 weeks ended Jan. 26, 2013. And, according to The NPD Group for the three-month period ending Dec. 31, 2012, we also improved market share1 in toys and the Walmart entertainment categories.
“Despite comps at the low end of the guidance, our market share1 gains, as noted by Nielsen and NPD, along with our two-year positive comp trend indicates the underlying strength of Walmart’s business,” said Simon. “Comp sales grew by 1.0 per cent for the quarter, lapping a solid 1.5 per cent comp last year. This represented $743 million in comp growth for the quarter.”
The Walmart U.S. 13-week comp for last year’s first quarter 13-week period rose 2.6 per cent.
“We are confident that our low prices will continue to resonate, as families adjust to a reduced paycheck and increased gas prices,” Simon said. “We see the underlying health of the Walmart U.S. business is sound, and sales trends are similar to what we’ve demonstrated in the last few quarters. However, February sales started slower than planned, due in large part, to the delay in income tax refunds. We began seeing increased tax refund check activity late last week in our stores, resulting in a more normalized weekly sales pattern for this time of the year. Due to the slower sales rate in the first few weeks of this year’s first quarter, we are forecasting comp sales for the 13-week period from Jan. 26 to Apr. 26, 2013 to be around flat. We continue to monitor economic conditions that can impact our sales, such as rising fuel prices, changes in inflation and the payroll tax increase.”
The Sam’s Club 13-week comp, excluding fuel, benefited from a 1.6 per cent increase in traffic and a 0.7 per cent increase in average ticket.
“Overall, we are proud of the accomplishments this year at Sam’s Club, but also recognise the mounting economic concern from both small businesses and consumers,” said Rosalind Brewer, Sam’s Club president and chief executive officer. “The business member at Sam’s Club is an integral part of our comp sales. Recent traffic patterns of our business members indicate that they are more deliberate in their spending due to macro-economic factors. Additionally, like Walmart U.S., our Advantage members are pressured by higher payroll income taxes, ongoing unemployment and higher gas prices. Our role at Sam’s Club is to support our members by creating value for them through price investments.”
Last year, Sam’s Club comp, without fuel, for the first quarter comparable 13-week period rose 5.3 per cent.
“Our primary growth for fiscal 2014 will come from comp sales,” Brewer said. Similar to Walmart U.S., the first two weeks of our first quarter comp period were below plan, but have improved over the last week. “We expect comp club sales, without fuel, for the current 13-week period from Jan. 26, 2013 through Apr. 26, 2013, to range between flat and 2.0 per cent.”
Walmart U.S. and Sam’s Club will report comparable sales for the 13-week period ending Apr. 26 on May 16 when the company reports first quarter results. For fiscal year 2014, Walmart will report comparable store sales on a 53-week basis, with 4-5-5 reporting for the fourth quarter. Walmart’s comp reporting first week starts with Sat., Jan. 26, 2013.
ORIGINAL: Heads up: we are just minutes away from Wal-Mart’s fourth-quarter earnings release, due out at 7 AM ET.
Analysts expect the company to post earnings of $1.57 per share and $128.5 billion in sales.
Shares of the global retailing giant are down 3.2 per cent since Friday, when leaked emails circulating among executives characterised February sales figures as a “total disaster,” off to the worst monthly start in at least 7 years.
We will have the full release LIVE at 7 AM ET. Click here to refresh for updates >