For fiscal 2022, the retail giant's ecommerce sales grew 90% compared with two years ago, before COVID-19 was widespread in the United States. For Q4, online sales grew 1% but 70% compared with two years ago.

In its fourth quarter and fiscal year 2022, which ended Jan. 31, Walmart’s ecommerce sales continued rising past levels reached during the pandemic-driven ecommerce surge in fiscal 2021.

For fiscal 2022, the mass merchant retailer reported ecommerce sales grew 11% year over year and a massive 90% compared with two years ago. For Q4, online sales at the retailer grew 1%, compared with the same quarter a year earlier, but 70% compared with two years ago.

Those two-year comparisons are noteworthy because Walmart’s fiscal 2020 ended less than two weeks after scientists confirmed the first COVID-19 cases in the United States. That timing provides a helpful time division between the pre-pandemic state of the retailer’s business and how it operates now, in the wake of the coronavirus crisis.

The retailer also reported that, excluding divestitures of units in U.K., Japan and Argentina, ecommerce penetration for fiscal 2022 would have been 13%. Fiscal 2022 ecommerce net sales were $73.2 billion, according to an investor presentation.

Walmart is No. 2 in the 2021 Digital Commerce 360 Top 1000 ranking of North America’s leading online retailers.

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During a Thursday conference call with analysts, Walmart CEO Doug McMillon said the retailer uses its stores differently now than in the past.

“Our stores have become hybrid. They’re both stores and fulfillment centers,” he said, according to a transcript posted on Walmart’s website. In fiscal 2022, he said, the number of online orders fulfilled from our stores grew by 170% year over year. And that was on top of more than 500% gain from the year before.

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“Having inventory so close to so many customers is a competitive advantage. In some cases, we’re getting items to customers in hours rather than days,” McMillon said.

He added that the retailer increased its order pickup and delivery capacity by nearly 20% in fiscal 2022 and expects to increase that capacity by another 35% in fiscal 2023.

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Walmart+ progress

One important part of Walmart’s online operation is Walmart+, a membership program that offers free same-day grocery delivery on orders of $35 or more, free shipping on Walmart.com orders with no order minimum (excluding most orders fulfilled by marketplace sellers) and other benefits, including fuel discounts.

“Our membership offering, Walmart+, continues to be an important piece of what we’re building,” McMillon said during the conference call.

But, as it has since it introduced Walmart+ in September 2020, the retailer declined to provide specific membership numbers.

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“We’re not going to share Walmart+ yet. I don’t really want to have the company defined by one metric. And with subscriptions being such a topic these days, everybody gets really focused on that,” McMillon said in response to an analyst’s question about Walmart+ membership data.

McMillon said Walmart+ is important because it helps Walmart grow its ecommerce business, deepens the retailer’s relationship with customers and provides useful data. “And, at some point, we’ll probably talk about that number,” he added.

Consumer Intelligence Research Partners LLC (CIRP) issued a report earlier in the week estimating that Walmart+ represents a little more than one-quarter of Walmart.com customers, amounting to 11.5 million members, as of January 2022.

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Struggles with supply chain costs and inflation 

During the conference call, Brett Biggs, Walmart’s chief financial officer, said the retailer faced “significant unexpected expenses” related to the recent surge in the omicron variant of the virus that causes COVID-19.

Supply chain costs were more than $400 million higher than expected, Biggs said. Pandemic-related costs for the year were lower than the previous year but included significantly higher costs related to employees falling ill with COVID-19 infections and therefore unable to work. “In the first three quarters combined, COVID leave costs were about $600 million but increased to more than $450 million in Q4 alone,” Biggs said. He added that Walmart is working with suppliers to manage inflation and found a few places where it could roll back prices.

Philip Melson, client partner at Fractal Analytics, a provider of technologies based on artificial intelligence, calls Walmart’s earnings “a bit of a bright spot to kick off what is a big couple of weeks in terms of retail financials.” However, he says Walmart faces challenges because of increased supply chain costs and the impact of inflation. Both of those issues will provide “interesting reading” when Walmart releases its Q1 results for fiscal 2023 later this year, he added.

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“Moreover, given the challenges that Walmart has faced in supply chain costs and inflation, it will be very interesting to see how mid-sized and even large retailers that are perhaps less sophisticated and have fewer resources than Walmart have been able to weather these two large hurdles,” Melson says.

For the quarter ended Jan. 31, 2021, Walmart reported: 

  • Total revenue of $152.87 billion, up 0.5% from $152.08 billion for the year-ago quarter.
  • Operating income of $5.89 billion, up 7.3% from $5.49 billion a year earlier.
  • Ecommerce sales growth of 1% year over year and 70% over a two-year stack.
  • Total U.S. sales of $105.3 billion, up 5.7% from $99.6 billion in the same period last year.
  • International sales declined 22.6% to $27.0 billion from $34.9 billion, following the sale of non-U.S. business units.
  • Total sales at Sam’s Club warehouse stores increased 16.5% to $19.2 billion from $16.5 billion for the year-ago period

For the fiscal year ended Jan. 31, 2022, Walmart reported:

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  • Revenue of $567.76 billion, up 2.3% compared with $555.23 billion a year earlier.
  • Ecommerce net sales of $73.2 billion
  • Operating income of $25.94 billion, up 15.1% from $22.55 billion a year earlier.
  • Ecommerce sales growth of 11% year over year and 90% over a two-year stack.

Percentage changes may not align exactly with dollar figures due to rounding.

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