Shares of Walmart Inc. (NYSE:WMT) were up 1.84% in early afternoon trading on February 22. The stock has now dropped 5.5% in 2018 thus far. Walmart saw investor sentiment dip after it released its 2017 fourth quarter and full-year results on February 20.
In the fourth quarter total revenue was $136.3 billion which represented a 4.1% jump from the prior year. Walmart U.S. comp sales climbed 2.6% and comp traffic rose 1.6%, the company highlighted that on a two-year stack its comp sales growth was the best in eight years.
For the full-year revenue grew 3% to $500.3 billion. Consolidated operating income dropped 10.2% to $20.4 billion and Walmart generated $28.3 billion in operating cash flow while returning $14.4 billion to shareholders through dividends and stock buybacks. Walmart offers a dividend of $0.52 per share representing a 2.2% dividend yield.
In spite of the fourth quarter and full-year growth, skepticism abounded due to lower fourth quarter profit and saw lower-than-expected e-commerce growth during the holiday season. Most alarmingly, Walmart was outpaced by e-commerce giant Amazon.com, Inc. during this period, a troubling sign for some onlookers.
Walmart struggled with its online inventory during peak season, reportedly failing to stock enough everyday items. Analysts promptly called into question its preparedness to fight a battle with Amazon going forward. The company also pushed vendors to raise prices which puts it into the range of Amazon pricing, another warning sign going forward.
Walmart leadership claimed its analysis of the benefits of tax reform were incomplete, but that its tax rate would be between 24% and 26% in the current fiscal year.
