Walmart's full-year sales increased by 6.4%, and its multi-faceted layout helped maintain stable performance

Walmart's full-year sales increased by 6.4%, and its multi-faceted layout helped maintain stable performance

Walmart's U.S. sales grew 5.6% in the fourth quarter, building on last year's full-year growth , and 6.4% for the full fiscal year , with total sales increasing to $393.2 billion this fiscal year .

 

As epidemic restrictions were relaxed and offline stores opened , Walmart 's digital growth slowed in the fourth quarter, with U.S. e-commerce sales increasing by only 1 %. However, its membership fees and other revenues in 2021 were approximately $5 billion, up 27.4% from the previous year .

 

Walmart used its massive scale to keep its shelves stocked in the fourth quarter amid unprecedented supply chain turmoil in 2021. Before the holiday shopping season began , Walmart and its competitors assured customers that they could handle freight crises and supply chain disruptions.

 

At the time, Joe Metzger, executive vice president of Walmart's U.S. supply chain operations , said Walmart was ensuring adequate inventory of goods by chartering ships, changing ocean and inland transportation routes, raising employee wages, hiring truck drivers and supply chain employees, and increasing warehouse capacity .

 

Walmart also mentioned in its earnings report that the company prioritizes inventory levels, with U.S. inventory up 28% in the fourth quarter . This is partly attributed to the increased costs of these items during the out- of -stock period over the past year , as well as the increase in in-transit transportation due to restocking and sales .

 

The sales came at a cost, though. In an investor presentation, Walmart said supply chain costs in the fourth quarter exceeded expectations by more than $400 million , more than many retailersentire fourth- quarter revenue.

 

But Walmart can afford these additional costs, largely due to its size and financial strength , with billions of dollars flowing in that are not affected by the supply chain. In addition, Walmart 's advertising business, which is worth more than $2 billion , cannot be ignored.  

 

Walmart CEO Doug McMillon said its business model is changing and its business is becoming more digital. The growth of first-party and third-party e-commerce businesses provides Walmart with opportunities to increase advertising revenue.

 

While advertising revenue has nothing to do with retailing itself, its profits are helpful, and those profits help Walmart keep prices low for customers and meet operating income targets.

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