On Thursday, Walmart reported stronger-than-expected fourth-quarter earnings results, driven by strong e-commerce growth that spiked during the COVID-19 pandemic. The nation’s largest private employer also announced it is raising wages for 425,000 of its nearly 1.5 million employees.

Video Transcript

JULIE HYMAN: All right, let's take a look at Walmart shares this morning, because they are down more than 5 and 1/2% on the back of earnings per share that missed estimates, even though sales are still going gangbusters. Brian Sozzi, you've been digging into the numbers.

BRIAN SOZZI: Yeah, Julie. I think why you're seeing the pressure on the stock is really, their guidance for this year at Walmart, looking for operating income to EPS, flat to up slightly, market does not like that. But I really dug down into this report and found some things that maybe the market's overlooking, or just not talking about, but could be fun nonetheless.

Walmart did see an acceleration in sales in January. They gave a shout out to stimulus. That is pretty good to see. They also noted a larger basket size, really continuing a trend we've seen from Walmart and a lot of these discounters over the past year. That is probably good for a lot of food companies, big packaged food companies that we've been talking to.

And then last but not least, Sam's Club. Membership income up 12.9% year over year. That's the fastest growth rate in six years. That is Walmart's Netflix business model, that recurring revenue stream in Sam's Club, that has turned into a very good business for this company, a good profitable income stream, and they're going to need it, because Walmart outlined $14 billion in Capex this year. Last year, guys, they only spent $10.2 billion. They highlight in the release a lot of focus on automation, which is interesting because when I hear automation, Myles and Julie, I think maybe that's fewer employees in the stores, fewer employees in the warehouses.

JULIE HYMAN: All right, we'll keep watching those shares and see what happens next.