Walmart beats profit expectations as demand remains steady at stores

Walmart Inc beat full-year profit and US sales expectations, signaling steady demand at stores even as supply-chain issues during the holiday season and rampant cost inflation pressured the retail giant's margins.

While Walmart has increased prices on some products, it still undercuts rivals due to its scale and negotiating power with suppliers, helping it gain market share in key areas of business such as groceries.

Walmart has previously said it has been asking suppliers to keep prices low in order to take market share, US chief executive John Furner said in November. In Thursday's release, the company said that "competitive pricing remains in focus globally."

However, the company's focus on its "Everyday Low Price" strategy has pushed up costs as it spends heavily to get around supply-chain challenges by speeding up shipments and chartering its own cargo ships.

The Bentonville, Arkansas-based retailer said supply chain costs were over $400 million higher than it expected at the start of the quarter.

Still, the retailer was able to eke out a 54 basis point growth in margins in the United States, helped in part by increased revenues from its Walmart Connect advertising business.

The company forecast fiscal 2023 adjusted earnings per share growth of 5% to 6%, while analysts had expected a 4.4% increase, according to Refinitiv data.