Walmart said on Tuesday that while it continued to monitor the coronavirus outbreak in China and around the world, the company was not lowering its sales forecast for this year.
The announcement, released with Walmart’s fourth-quarter earnings, that the coronavirus had not yet affected the outlook for the year for the world’s largest retailer came one day after Apple warned of a slowdown. The iPhone maker had said that the supply of smartphones was hampered because the factories in China where they are made were not resuming production as quickly as expected. Apple also said demand for its smartphones in China had been hurt because the virus outbreak had forced the company to close all 42 of its stores.
Walmart relies on factories in China to produce an estimated 15 percent of its merchandise. That’s a smaller percentage than other American retailers like Target and Best Buy, but still a significant part of its supply chain.
Walmart did note that its holiday sales were “a little softer than expected,” leading to a rare miss of its revenue and sales targets in its most recent quarter.
The retailer said its same-store sales in the United States grew 1.9 percent during the quarter ending January 31, which was lower than the 2.3 percent that Wall Street analysts had expected. The company’s adjusted earnings per share of $1.38 were less than the $1.43 it had forecast, while revenue was $141.7 billion, slightly less than Wall Street’s expectation of $142.5 billion.
The company blamed its disappointing results on political turmoil in Chile, as well as “softness” in a few general merchandise categories in its United States stores.
“Sales leading up to Christmas in our U.S. stores were a little softer than expected,” Doug McMillon, chief executive of Walmart, said in a statement.
The one bright spot in the quarter was record sales growth in e-commerce of 37 percent.
Walmart said late last month that its 430 stores in China have remained open during the health crisis because the retailer supplies food and other critical household staples. Store hours have been reduced, however, because many customers are subject to quarantines.
Walmart was one of the first American retail brands to operate in China, opening its first store there in 1996. Although its network of stores in China is not large compared to its footprint in other markets, Walmart has made large investments in online shopping in the country.
Walmart owns a minority stake in JD.com, one of China’s leading e-commerce players. The two companies recently invested together in a grocery delivery start-up. Walmart said on Tuesday that its assumptions of the value of its equity stake in JD had not changed.