The economy of the US is based on shopping or consumer spending (66%) and the biggest retail on the planet is Walmart. If you want a good picture of how the economy is doing, you want to look at Walmart because it also one of the best run companies on the planet. Walmart is an operational superstar and given its scale, the expectation is whatever the supply chain problems, Walmart has a partial solution.
In an article by Arriana McClymore and Uday Sampath Kumar of Reuters, Walmart had a very good year in beating profit and sales expectations.
CFRA Research analyst Arun Sundaram said given high inflation, we expect consumers to trade down stores and that should bode well for Walmart in 2022.
Walmart’s 4th quarter net revenue was up 0.5% to $152.87 billion. Adjusted earnings per share was $1.53 or 3 cents higher than estimates. Stores open for more than one year showed a 5.6% increase.
Online sales was up 1% after a blockbuster increase of 69% the year before. The previous quarter was up 8% and analysts were expecting a 10% increase.
Walmart’s answer to Amazon is Walmart Connect marketplace and CEO Doug McMillon says another 40,000 sellers will be added to the service. In addition, Walmart is expanding its pickup and delivery service by a third.
Linking to dividend paying stocks, for a long time Walmart has operational excellence and it was the resources to move into any marketplace it wishes to. It might be on the minds of consumers for rolling back prices, but how it manages to do what it does is the reason why it has scale and negotiation power with suppliers. It is a company where you can see what Walmart does very well and compare them to other alternatives.
There are more questions than answers, till the next time – to raising questions.