Walmart (WMT) has announced impressive fourth-quarter results, surpassing Wall Street’s expectations and demonstrating robust sales growth. The retail giant reported a 4% increase in Walmart US same-store sales, exceeding Bloomberg consensus estimates of 3.12%. E-commerce sales witnessed a significant surge, jumping 23% year over year to surpass $100 billion, reflecting consumers’ preference for value, especially online.
CEO Doug McMillon attributes the success to Walmart’s enhanced customer experience during the high-volume holiday season. While foot traffic at stores dipped 1.1% in Q4, there was a subsequent improvement at the end of December, turning positive in January. Walmart’s ability to attract shoppers, including higher-income customers, has been notable, with foot traffic rising in recent years.
Walmart anticipates consolidated net sales to grow between 4% and 5% in Q1 fiscal year 2025. The company also raised its annual dividend by 9%, leading to a more than 5% increase in its stock value. Adjusted earnings per share are projected to range from $1.48 to $1.56 on a pre-stock-split basis.
In a strategic move, Walmart confirmed its acquisition of smart TV maker Vizio (VZIO) for $2.3 billion. This acquisition is expected to accelerate Walmart’s retail media business, Walmart Connect, by leveraging Vizio’s connected TV platform. The deal aims to enhance Walmart’s ability to market products across its ecosystems and explore opportunities for direct e-commerce sales on the connected TV platform.
Walmart CFO John David Rainey emphasized that advertising is a fast-growing, high-margin aspect of their business, and the Vizio deal complements their organic initiatives. Telsey Advisory Group’s Joe Feldman sees the acquisition as a valuable step for Walmart to compete with Amazon Prime and expand its ecosystem, including the Walmart+ membership platform.
Despite some skepticism about the price Walmart is willing to pay, analysts view this move as another example of Walmart’s willingness to take calculated risks for digital growth. Walmart has a history of strategic acquisitions, including Jet.com, Flipkart, Moosejaw, and Bonobos.
The deal with Vizio is expected to provide Walmart with valuable consumer data, aiding in the growth of its ecosystem. Walmart sees this acquisition as a logical step that aligns with its commitment to better serving customers and enhancing its digital capabilities.
