Walmart sees hope for progress in home, shares outlook on general merchandise cadence

Category: General

Country: United States

Q4 ends with inventories flat

Jennifer Marks
Editor in Chief
February 21, 2023

Bentonville, Ark. – Walmart U.S. sees several metrics moving in the right direction, but inflationary prices in food and health & wellness are still casting a pall over margins.

“We’re improving in categories like apparel and home. Our recently remodeled stores have a focus in those areas, and the early response from customers is promising.  We’re also improving our e-commerce assortment and presentation in those categories,” Walmart Inc. CEO Doug McMillon told investors during this morning’s Q4 call.

General merchandise comp at Walmart U.S. stores declined in the mid-single digits during the quarter, which ended Jan. 28. Walmart saw softness in not only home and apparel but also in toys and electronics during the holiday quarter. Sales were strongest in automotive and seasonal hardlines.

The lopsided contribution from food to the sales mix hasn’t changed, and the company doesn’t expect it to in the near future. In addition, “stubborn” inflation in key grocery and wellness categories continues to weigh on Walmart’s core customers.

At Sam’s Club, the home & apparel division generated a high single-digit comp gain, with strength coming from seasonal, apparel, toys and tires.

4 quick takeaways from the call:
-Walmart U.S. is gaining share across all incomes, and higher-income households made up nearly half of the gains in Q4.
-December was largest sales month in Walmart U.S.’s history, driven primarily by growth in food.
-Walmart Marketplace has grown to more than 400 million skus offered by third-party sellers – something the company hopes will attract more non-food orders from higher-income shoppers.
-The company expects sales growth to be stronger in the first half of the year, then more moderate in the second half against year-over-year comparisons.

“I think the headline here is ‘strong results, great team, bright future,’” McMillon told analysts. “We’re on our front foot as we start the year.”

Courtesy: https://hfd.bridgetowermedia.com/acton/ct/41765/s-2765-2302/Bct/q-005e/l-0019:91ab0/ct6_2/1/lu?sid=TV2%3AjtQTPiiYo