Wal-Mart Stores Inc. announced Thursday ahead of its Q4 report that it will provide some 500,000 hourly workers—nearly 40% of its U.S. workforce—with pay raises in the next six months. Wal-Mart will also institute new training programs to provide a better lit path to workers' futures with the company, all at a cost of $1 billion.
The retailer reported adjusted Q4 earnings of $1.61 per share, down from $1.60 last year and beating a $1.53 forecast. Revenue rose to $131.57 billion from $129.71 a year ago; the forecast was for $132.26 billion in revenue.
Q4 same-store sales rose 1.2%, giving the company its second quarter of same-store sales growth and beating its own estimation of flat or 1% growth.
Wal-Mart Stores' Q4, which includes the holidays, was a bit better than expected, although the news seems to be overshadowed a bit by the wages announcement that came before the earnings report.
The retailer is taking steps to address long-standing criticism of its treatment of workers through not just its pay raises but also its new training programs. With the new wage increase, the retailer's average full-time wage will be $13 an hour (still below the $14.65 average for hourly non-supervisory retail workers in the U.S.), and the part-time average will be $10 an hour.
Furthermore, Wal-Mart's pivot to smaller, less rural stores may be helping its bottom line; traffic at U.S. stores rose 1.4%, compared to its previous steady reports of declining traffic at its big-box stores.
Chatter about a possible spinoff of the retailer’s warehouse Sam’s Club business revived in anticipation of the quarterly report, as it is seen as potentially beneficial to investors and company strategy.