Walmart’s Pretty Good Year

The fourth quarter financial numbers are in and they prove Walmart (NYSE: WMT) had a pretty good year in 2016. The latest earnings report shows the world’s largest retailer is having some problems but it is proving the naysayers wrong.

Some of the main lessons we can learn from WMT’s latest set of financial numbers include:

  • Walmart’s revenues are growing. The revenues reached the highest level yet on January 31, 2017 – $485.87 billion.

  • Walmart’s revenues grew by $3.74 billion in 2016, rising from $482.13 billion to $485.87 billion.

  • Walmart had a respectable holiday season in 2016. Revenues increased by $1.27 billion during the fourth quarter rising from $484.6 to $485.67 billion.

  • Walmart is generating a lot of cash its free cash flow was $8.726 billion on January 31, 2017.

  • Walmart’s free cash flow is lower than last year. It reported $9.13 billion in free cash flow on January 31, 2017.

  • Walmart’s cash flow is growing. Its cash from operations grew from $27.93 billion in January 2016 to $31.53 billion a year later. That was an increase of $3.6 billion.

  • Walmart is making less money from its business. Its’ net income in January 2017 was $1.05 billion lower than in January 2016. Walmart reported a net income of $14.69 billion in January 2016 and $13.64 billion a year later. This is probably the figure that prompted Warrant Buffett to sell his WMT shares.

  • Walmart still has a lot of float left: it reported $198.82 in assets and $6.867 billion in cash and short-term investments on January 31, 2017.

  • Walmart investors still made money they received a return on equity of 17.59% on January 31, 2017. They also collected a 50¢ dividend on December 7, 2016.

All this shows us that Walmart is still a pretty good value investment it is also enjoying some success online.

Walmart has had some success online, in July 2016, was the third most popular online retailer in America. It attracted 101 unique million viewers, a number exceeded only by eBay’s 107 million visitors and Amazon’s 183 million, Statista data indicates.

U.S. ecommerce sales at Walmart grew by 36% between fourth quarter 2015 and the same period in 2015, Business Insider reported. Global ecommerce increased by 15% during the same period.

That indicates Walmart’s business model of deep discounting can work online. Some of Walmart’s other experiments are working sales volume at its Pickup Today service grew by 27% between 2015 and 2016. Pickup Today is a Click and pull option in which customer orders from and picks up at a brick and mortar store. One sure sign of Pickup Today’s success is that Amazon is trying to imitate it with brick and mortar stores of its own.

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