On Tuesday, Walmart CEO Doug McMillon told CNBC's Jim Cramer that the company is "not participating in a recession if there is one" by keeping prices low for Walmart's own brands.
McMillon has stated his desire to "play a role in helping get prices down," despite his preference for the company's brand partners and suppliers to "step forward" on their own to reduce pricing.
"I think we have historically shown that we can bring prices down," the CEO said.
On Tuesday, the retailer announced strong earnings for the holiday shopping season, thanks to its ability to attract price-conscious shoppers in search of sales and specials. The corporation's annual revenue hit a whopping $611 billion, setting a new high water mark.
Despite the big-box retailer's weaker-than-anticipated prognosis for the coming year, shares closed Tuesday up marginally.
The business forecasts a 2% to 2.5% increase in same-store sales for Walmart U.S. in the coming fiscal year, excluding the impact of gasoline. The consensus forecast among industry experts, as reported by StreetAccount, was for a growth of 3%. It expects adjusted earnings per share to be in the $5.90-$6.05 range (before the cost of fuel).
Despite increased expenses for Walmart and its competitors, McMillon told Cramer he was sure that Walmart's lower-priced products would force other brands to bring down their own pricing.
"Over time, the market works," McMillon said. "We believe branded manufacturers and all of our suppliers of all types will have to respond to that market in time."
Walmart is starting cautiously into the new year, offering more conservative forecasts for the current fiscal year than Wall Street anticipated.
The company is a major player in the food and grocery industries as well as the retail sector. Due to increasing inflation, consumers are keeping a close eye on their spending, and this has helped maintain sales and boost foot traffic.
Walmart's massive grocery sector, along with the store's reputation for low prices, have both contributed to the company's success. In terms of sales, it dwarfs any other supermarket in the country. New clients of varying socioeconomic backgrounds have been drawn in by the low cost of these groceries.
Walmart has solved a problem that has troubled other stores: An overabundance of products that accumulated in warehouses and eventually found their way to the discount bins. Walmart U.S.'s stock is down 3% from a year ago but is otherwise about flat.
