Walmart said it has been gaining significant ground over the course of a year of the still ongoing COVID-19 pandemic.
The retailer said in its fourth-quarter 2021 earnings release on Thursday that overall revenues for the year were $559.2 billion, a 6.7 percent increase, and that its U.S. e-commerce revenues increased 79 percent.
In the quarter ended Jan. 31, revenues rose to $152.1 billion, a record haul that the retailer said was a 7.3 percent increase from last year, while comparable store sales increased 8.6 percent. The company’s online sales for the quarter continued to surge, this time rising by 69 percent.
The retailer’s consolidated operating income for the quarter was $5.5 billion, a 3.1 percent increase from last year, and adjusted earnings per share were $1.39. But overall Walmart also recorded a consolidated net loss for the quarter of roughly $2.09 billion.
“This is a time to be even more aggressive because of the opportunity we see in front of us,” said Walmart chief executive officer Doug McMillon. “The strategy, team and capabilities are in place. We have momentum with customers and our financial position is strong.”
The retailer said Thursday that it had spent $1.1 billion in the fourth quarter on COVID-19-related costs, and that it planned to continue raising wages for some 425,000 employees in order to raise the average hourly wage for workers to above $15 an hour.
On Thursday, Walmart employees who are members of the worker advocacy group United for Respect pointed out the new average hourly pay statistic publicized by Walmart obscures that the raises only apply to roughly a quarter of its 1.5 million person workforce, and that the starting wages for a large percentage of its hourly workers continues to be $11 an hour. A significant portion of the retailer’s workforce also includes part-time staff.
“As an online grocery pickup worker, I may be one of the few fortunate enough to benefit from these raises, after struggling for the past several years to take care of myself on $13.15 an hour,” said Drew Board, a Walmart Online Grocery Pickup worker and a United for Respect leader. “While an additional $1 an hour is a boost for me, it’s laughable for Walmart to tout these raises as generous when they are leaving out the overwhelming majority of my coworkers, who will continue to scrape by on poverty wages. And where some is given, some is taken away — the raise announced today will be offset by our loss of quarterly bonuses.”
Walmart employees who have been vocal about their working conditions have continued to emphasize the ongoing hazards of their work during the pandemic, telling the press about their ongoing workplace safety concerns including crowded aisles, especially during the holiday shopping season, having to deal with unmasked customers, and going without consistent hazard pay while the company makes record earnings.
The workers have sought a minimum $15 an hour wage, as well as at least $5 an hour in additional hazard pay during the pandemic, and are currently also pushing the retailer to offer incentives to its workers to prioritize them to receive COVID-19 vaccinations.
Walmart has said it has spent more than $4 billion in COVID-related costs over the past year, including one time bonus payments.
John Furner, president and chief executive officer of Walmart U.S., said in the retailers’ analysts’ conference Thursday that the company was particularly investing in parts of the workforce that it saw as vital in its supply chain, particularly inventory management and distribution.
“Last year, in different parts of the year, we had times where we were proud of our inside position, and we had other times where we had extreme pressure in the supply chain,” he said. “And that would include availability, surges in business. We had the stock up phase, which left us in a position of out of stocks for a long amount of time.”
Walmart also said it had approved a $20 billion share buyback program that would be implemented over the next three years. The company’s executives said its allocations toward wages and investors were meant to cap off a year of record sales for a retailer that was deemed essential during the pandemic.
“During the year, we saw elevated sales levels related to customers stocking up, eating at home, entertaining and educating at home, and investing in home decor and their yards,” said Brett Biggs, Walmart’s chief financial officer, in the company’s analysts conference Thursday. “And, of course, those things were supported by stimulus spending. In parallel, we had incremental COVID-19 costs, some of which will continue. We had a strong holiday season, followed by an acceleration in January.”
In the lengthy analysts conference, company executives sought to also project a message of accelerating growth, saying they planned to continue investing in technology and logistics to emphasize customer services and to drive its e-commerce business toward profitability.
Executives indicated that they view the company’s large number of physical stores in the U.S, and its e-commerce business as a symbiotic asset in some ways, emphasizing that they view their stores as a major advantage as they build out their fulfillment center infrastructure.
The retailer said it plans to scale its automation efforts, build out its distribution centers and e-commerce fulfillment centers and find ways to integrate them with its store presence. The goal ultimately is to fully reorient the retailer as an all-encompassing service for customers.
Already in recent years, Walmart has stepped up its customer service offerings to include pick up services, a feature that it ramped up during the ongoing pandemic that has deterred in-store shopping amid health officials’ exhortations on social distancing and self-isolating.
The retailer also launched its Walmart+ subscription delivery service last year, which McMillon said the retailer plans to add more features to as it works to entice a new customer base. The idea ultimately is to meet customers’ evolving and heavily online shopping habits even after the pandemic, he said.
“Customers can choose to visit a store, pick up their order, have it delivered, have it delivered into a secure box on their front step, into a garage refrigerator, or all the way into their kitchen, even when they’re not at home,” McMillon said.
As the retailer builds its physical infrastructure, it has also been boosting its IT capabilities as it pivoted to supporting its own suddenly online corporate workforce during the pandemic, and to meet the heavy order volumes coming in during the holiday season in particular.
The company has upgraded tens of thousands of servers and moved more of its digital services operations to cloud networks, said Suresh Kumar, executive vice president and global chief technology officer.
“Migrating to the cloud allowed us to keep the site available for our customers while operating a lot more efficiently because we could scale up and scale down in a very seamless manner,” Kumar said.
“Supply chain [also] scaled very well during the holiday,” he added. “We lit up over 2,500 stores to start delivering online orders…because we built a system that crunches millions of pieces of information to find the fastest and lowest [costs] to deliver a particular order to a very specific customer.”