Walmart Needs More Than Record Q4 Results To Wow Customers And Investors 

When the world’s largest retailer reports its Q4 results on Thursday morning (Feb. 18), analysts are expecting Walmart to deliver record holiday sales that outpaced Amazon’s by $2 billion a week. But even that won’t be enough, as investors also seek updates on digital and delivery.

As investors the world over await Walmart’s critical year-end earnings report, there’s one thing everyone agrees upon: The self-titled “low-cost leader” is not only enormous, but it’s second-to-none when it comes to dealing with change and unexpected developments.

Despite the advantages of operating 11,500 stores and 55 brands in 26 countries, that type of breadth also carries its share of challenges — not only from aggressive digital competitors like Amazon, but also from more generic obstacles, like shifting global economics and even the weather.

For example, in the past few days alone, Walmart has had to temporarily shutter nearly 10 percent of its U.S. stores — including its flagship Bentonville, Arkansas location — due to freak snowstorms ravaging the south. At the same time, the company also completed the sale of its 600-store Asda unit in the U.K. (after two tries) for $9.4 billion, as part of a broader plan to focus on faster-growing international markets and online sales, all while buttoning up what is expected to be the best holiday quarter in its 75-year history.

What Will Walmart Do?

Even though Walmart’s $400+ billion market value is only one-fourth that of rival Amazon’s, it is still bigger by at least one important measure: total sales. In fact, if analysts’ forecasts are right, Walmart will have outsold Amazon during the three-month holiday quarter by almost $2 billion per week. Said another way, Walmart is expected to report revenues of $149 billion, compared to the record $125 billion quarter Amazon posted two weeks ago.

On the profit front, Walmart is projected to deliver about 9 percent earnings per share growth of $1.50, up from $1.38 in 2020 (also known as the pre-COVID era). Over the past 12 months, Walmart has faced unprecedented attacks on its total share of retail sales, as well as in key categories like food and auto parts, where its lead has been gradually slipping, or electronics, where it has fallen way behind.

But no matter what outlet, platform or SKU is at stake, the question it faces is similar: what will Walmart do?

Bricks and Clicks

For a company that prides itself on the fact that 90 percent of the U.S. population lives within 10 miles of a Walmart, it’s safe to say that its brick-and-mortar business is not going anywhere anytime soon. But that’s not to say that those giant stores won’t increasingly serve as fulfillment centers for online orders, as well as places to get vaccines, clean your teeth or wire money to relatives outside the country.

Investors will be hungry for updates on any digital innovation Walmart has planned, as the company tries to remain relevant with young shoppers while also staying true to its roots as the hub of local community and commerce in many locations. One such area will include any update of Walmart’s on-again, off-again bid for the fast-growing social media video platform TikTok, which was being forced under former President Trump to find a U.S. buyer amid national security concerns. (TikTok’s owner has since walked away from those talks since President Biden took office.)

No matter what happens, Walmart’s interest in the trendy digital platform — as well as its ramped-up effort to seamlessly sell merchandise through it — will be of interest to analysts, particularly after the company’s third-quarter eCommerce sales rose 79 percent. Walmart will also be pressed for answers on its international operations — especially its most expensive foreign investment ever into India’s online marketplace, Flipkart.

And finally, there’s delivery — and what Walmart will do when it comes to going the final mile and getting goods to people quicker than Amazon. Updates on the company’s recently launched Walmart+ membership program will also be key, as will any news concerning progress of its drone pilot programs and its self-driving, all-electric grocery delivery service.