Walmart, the largest retailer in the United States, said on Thursday that strong holiday sales pushed his income to another annual record, but lower growth anticipated, while shoppers were dealing with stubborn inflation, the uncertain impact of rates and a potential rise in the unemployment.
Walmart, which brings in millions of customers every week, is a Bellwether of American consumer trends. Investors have withdrawn from the weaker than expected prediction, a rare loss of Momentum for the company that has posted a series of bumper results.
Walmart said that in his last financial year, the turnover increased to $ 681 billion, which runs until January, an increase of 5.1 percent compared to the previous year. The annual profit of the retailer jumped faster than the turnover, up to around $ 20 billion.
The crucial holiday shop season was a strong for the retailer, with more people who visit stores and shop online and spend more on every visit last quarter. Sales of e-commerce in the United States increased by 20 percent.
“We win market share, our top line is healthy and we are in excellent form with inventory,” said Doug McMillon, Chief Executive of Walmart, in a statement.
But looking ahead, the company said it expected that income would rise by 3 to 4 percent this year. That was a bit lighter than analysts expected, and the shares of Walmart fell by around 8 percent on the market.
“The company had a very strong 2024 and the company had a number of very strong years since the start of the pandemic,” said David Silverman, a retail analyst at Fitch Ratings. “It is just a mathematical challenge to maintain these levels of growth.”
As Walmart has said in recent years, shoppers with a higher income, who defines the retailer as those who earn more than $ 100,000, helped the market share. These consumers are better able to absorb higher prices, because inflation has recently been checked. Walmart called the rising egg prices as an important factor that pushed prices higher in recent months.
Walmart said that his stock levels rose by 3 percent last quarter. In response to President Trump's rates, analysts have expected that retailers such as Walmart would order more goods from China and elsewhere to lead the taxes.
“The biggest challenge on the horizon for Walmart and everyone else is how the image of the rates cleans up,” says Sheraz Mian, director of research at Zacks Investment Research.
In November, Walmart tried to remove the concern about Wall Street about the exposure to rates by saying that about two -thirds of the merchandise it sells comes from the United States. This is partly due to the large supermarket company of Walmart.
Yet Walmart's financial chef, John David Rainey, said in an interview at the time that the company expected that new rates were imposed, would be inflationary to customers.
Shoppers with a lower income have less flexibility in their budgets to absorb higher prices. Although the company attracts more and more richer shoppers, the customer base is still largely skewed in the direction of people with a lower income.
The decrease in Walmart's shares on Thursday has set a dent in the strength of the share, which has risen by more than 70 percent in the last 12 months, so that the wider market performed considerably better, as well as competitors such as Amazon and Target.
“The share was literally received as if it was one of these high flier -technical shares – so very strong momentum,” said Mr. Mian. “The question has always been, when it slows that trend and when does the stress and pressure of customers with a lower income appear in results?” he added.
