Walmart Inc on Thursday forecast slowing sales for fiscal 2022, following a blockbuster year that saw demand for essentials and other items soar as consumers flocked to the retailer during lockdowns linked to the coronavirus pandemic.
The world’s biggest retailer forecast adjusted net sales to grow in the low single digits in fiscal 2022 which ends Jan. 31, much lower than the 8.5% growth seen in the preceding year.
Walmart also expects earnings per share to be flat-to-slightly up, below the 2.2% growth analysts had been expecting, according to Refinitiv.
Shares were down 4% in premarket trading after Walmart also said it took on about $1.1 billion in pandemic-related costs during the quarter, including higher wages for warehouse workers, bonuses for store employees and costs related to keeping its stores clean.
Walmart, which employs 1.5 million people in the United States, said it was raising wages to more than $15 per hour on average.
An early start to the holiday season and a boost from stimulus money late in the fourth quarter drove demand for electronics, toys and groceries.
Sales at U.S. stores open at least a year surged 8.6%, excluding fuel, in the three months ended Jan. 31, well above analysts’ expectations for a 5.6% rise, according to IBES data from Refinitiv.
Online sales rose 69% in the quarter, blowing past a 35% increase in the year-earlier period, but slower than a 79% surge in the third quarter.
The retailer has relied on its scale and strengthening online presence during the pandemic to attract new customers looking for a one-stop shop for their daily needs.
Operating income rose 3.1% to $5.49 billion in the quarter, while adjusted earnings were $1.39 per share. Analysts on average were expecting the company to earn $1.51 per share.