NEW YORK: Walmart reported another round of strong sales Thursday amid the coronavirus pandemic as it announced significant investments in higher employee wages and technology for growing e-commerce demand.
The retail giant, which has become a one-stop shop for many consumers during the pandemic, said the new investments will bolster delivery and curbside pickup programs connected to e-commerce and lift wages for some 425,000 US workers.
But shares fell sharply on the announcements, which included a disappointing fourth-quarter loss and a forecast for slower US sales growth and slightly lower profits in the coming year.
“Our business is strong, and we’re making it even stronger with targeted investments to accelerate growth,” said chief executive Doug McMillon in a press release. “This is a time to be even more aggressive because of the opportunity we see in front of us.”
Walmart reported a fourth-quarter loss of $2.1 billion from the accounting for asset sales, compared with profits of $4.1 billion in the year-ago period. Revenues rose 7.3 percent to $152.1 billion as the company pointed to a bounce from a strong holiday shopping season and a lift from a fresh US government stimulus package enacted at the end of 2020. For all of 2020, Walmart reported profit of $13.5 billion, down 9.8 percent. Annual revenues jumped 6.7 percent to $524 billion.
Walmart projected capital spending of $14 billion in fiscal 2022 compared with $10.3 billion in the year that just ended.
The wage increases will lift Walmart’s US employee average wage to above $15 per hour. However, Walmart did not alter its national minimum wage — currently $11 an hour — which partly reflects the difference between high- and low-cost regions in the US. About 730,000 of Walmart’s 1.5 million US employees will make at least $15 an hour with the latest change.