The largest retailer in the world Walmart (WMT) yesterday published its annual financial results along with some other retailers, including Home Depot (HD) yesterday after the market close. Walmart U.S. Q4 comparative sales grew 8.3% and 13.9% on a two-year stack. Thanks to its proactive consumer focused pricing policy it has continued to gain market share in grocery. Walmart U.S. eCommerce grew 17% and 18% on a two-year stack. Walmart International net sales were $27.6 billion, an increase of 2.1% and negatively affected by $0.9 billion from currency exchange impacts, while constant currency sales were $28.5 billion, an increase of 5.5%. Walmex, China, and Canada led the way. GAAP EPS came in at $2.32, whereas adjusted EPS was $1.71 excluding the effects of $1.16 from net gains on equity and other investments and $0.55 from charges related to reorganization and restructuring. The retailer somewhat beat top- and bottom-line forecasts, and initially demonstrated contrarian share price growth on the news.

Once again, although the discounter beat expectations for the holiday quarter, it gave quite a lackluster outlook for the year ahead. Unsurprisingly, Home Depot (HD) has published similar guidelines. The home improvement retailer also reported its fiscal Q4 results yesterday, saying it planned for flat same-store sales as stubborn inflation and rising interest rates kept consumers mindful of their spending.

At Walmart, that means shoppers are buying more everyday essentials like groceries and light bulbs than expensive items or essentials like electronics and home decor. At Home Depot, that could mean customers putting off home projects or opting for less expensive floor tiles or kitchen appliances.

Richard McPhail, Home Depot's CFO, said inflation is affecting customers' decisions. “We're seeing rising price sensitivity throughout the year, which is actually kind of a forecast given ongoing inflation," McPhail told.

Walmart Chief Financial Officer John David Rainey said Walmart considered challenging dynamics in its FY guidance. These include Fed rate hikes and lower consumer savings rates and more volatile balance sheets.