What is the 4-5-4 Calendar, and How Does it Work?

In this article, learn about: 

• How the 4-5-4 calendar came to be 

• Why retail uses a different calendar

• Structure of the 4-5-4 calendar

• How retailers deal with the infamous 53-week year

Many people view January 1st as the start of the new year, but in the retail industry, where timing influences reporting and planning, the calendar frequently operates under different guidelines. The 4-5-4 calendar, widely used by retailers, reorganizes the year to accommodate the distinct seasonal rhythms of retail and to make financial comparisons easier. It's a system that enables accurate, consistent year-over-year analysis and helps align key shopping periods across years. But how did this calendar come about, and what are its benefits?

How the 4-5-4 Calendar Came to Be

This structure, originating in the 1930s, was designed to address discrepancies in month-to-month sales reporting because of variations in the number of weekends. This meant a five-weekend month would appear more profitable than a four-weekend month, even though the underlying sales hadn't moved. To limit such variations, the 4-5-4 calendar was developed as a consistent format that allows retailers to compare performance across truly comparable periods. Today, it is a widely used, essential part of retail planning and financial reporting. 

Why Retail Uses a Different Calendar

For retailers and suppliers, the weeks between Thanksgiving and New Year's Day are critical because they produce a high volume of sales that are later offset by markdowns and returns. For this reason, many retailers begin their fiscal year in February, allowing the spikes and valleys of holiday shopping---and subsequent returns---to settle before January's financial books. This frees up the view for a cleaner new fiscal year.

Related Reading: Building A NextGen Revenue Recovery Team

The three-month quarters are organized as four weeks, five weeks, and four weeks on the 4-5-4 calendar. This maintains consistency in monthly and quarterly reports by setting the number of weekends at the same level for each quarter. By standardizing weekends, the 4-5-4 calendar ensures that comparisons are not impacted by variations in weekend sales. It also allows retailers to track, with a sense of reliability, how sales performance changes from year to year.

Structure of the 4-5-4 Calendar

In the 4-5-4 calendar, each quarter is arranged as follows:

• First Month: 4 weeks

• Second Month: 5 weeks

• Third Month: 4 weeks

This pattern repeats for all four quarters, leading to a 52-week fiscal year: (4+5+4) ×4 = 52 weeks. However, since the average year consists of 365 days (or 366 in a leap year), this system falls short by one or two days each year. Over time, those extra days add up, and to make up for it, an additional week is added approximately every five to six years. This extra week leads to what is called a 53-week fiscal year.

The 53-Week Fiscal Year 

Retailers handle this "extra week" in different ways. Some compare the 53rd week to the prior year's 52nd week, others omit it from analysis, and some---like Walmart---compare it to the first week of the same year. For example, WM Week 202353 is compared to WM Week 202301. 

Related Reading: How to Use the Walmart Fiscal Calendar

Walmart's approach is consistent across its reporting, so vendors who operate with Walmart should follow this practice to maintain consistency in comparisons year over year.

Why the 4-5-4 Calendar Matters for Vendors

This unique way of timekeeping doesn't just impact retailers; it has significant implications for vendors too. For instance, Walmart's preference to treat week 53 as comparable to week 1 may affect how suppliers analyze performance and forecasts for the following year. Inconsistent week-to-week data due to the extra week can throw a wrench in year-over-year comparisons if vendors aren't aligned with Walmart's methods. To avoid misinterpretations and the confusion that follows, it's essential for vendors to know and prepare for these shifts, ensuring that everyone is working from the same playbook.

The 4-5-4 calendar is more than just a way to track days; it's a framework that underscores retail's unique rhythm. From its origins as a fix for weekend disparities to its role in modern-day planning and reporting, this calendar is the unsung hero of the industry. And as we anticipate those occasional 53-week years, vendors and retailers alike must stay aligned to maintain clarity in their reports and performance metrics.

The next time you glance at a calendar, remember that for retailers and vendors, each date holds a layer of strategy. The 4-5-4 calendar doesn't just keep time---it sets the tempo for one of the world's fastest-moving industries.

SupplierWiki's Resources: Continued Learning 

Staying on top of Walmart's fiscal year can be challenging, but you don't have to do it alone. Download (or print) your complimentary Walmart FYE 2026 Calendar, which includes U.S. and international holidays, Walmart weeks, and the full 4-5-4 calendar breakdown.

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