Overview:
- Early Tuesday, Walmart's stock surged over 5% following the company's announcement of better-than-expected earnings and sales for its fiscal fourth quarter.
- Walmart anticipates a 4% to 5% increase in consolidated net sales for its fiscal first quarter.
- Additionally, Walmart revealed its intention to acquire smart TV manufacturer Vizio for $2.3 billion, aiming to enhance its advertising operations.
Walmart Stock shines over the holidays
During Walmart's fiscal fourth quarter, the retailer continued its trend of outperforming during challenging economic times when consumers are more budget-conscious.
This trend persisted as consumers, still grappling with the lingering effects of recent years' high inflation, turned to Wallmart for value.
Walmart Sales
For the quarter ending on Jan. 26, comparable sales at Walmart U.S. increased by 4%, contributing to an overall revenue growth of 5.7% to $173.4 billion.
This exceeded the consensus estimate of $158.4 billion. Wallmart also experienced robust growth in its global e-commerce sales, which increased by 23% and surpassed $100 billion in revenue for the year.
Additionally, Wallmart reported a 33% increase in its global advertising business, tapping into a lucrative revenue stream similar to that of its competitor, Amazon.
Gross margin saw improvement by 39 basis points, leading to a 13.2% increase in adjusted operating income to $7.25 billion. Adjusted earnings per share (EPS) rose from $1.71 to $1.80, surpassing analysts' expectations of $1.53.
In a move demonstrating confidence in the company's performance, management announced a significant 9% dividend increase to $0.83 per share, which is higher than usual for Wallmart.
Lastly, Wallmart's acquisition of Vizio aims to accelerate its Wallmart Connect advertising business.
Walmart CEO Statement
CEO Doug McMillon commented on the strong quarter, stating, "Our team delivered a great quarter, finishing off a strong year. We crossed $100 billion in eCommerce sales and drove share gains as our customer experience metrics improved, even during our highest volume days leading up to the holidays."
Will Walmart’s Growth Continue?
Looking forward, Walmart anticipates revenue growth of 3% to 4% in fiscal 2025, along with operating income growth of 4% to 6%.
On the earnings front, it projects pre-split adjusted EPS of $6.70 to $7.12, compared to $6.65 in fiscal 2024, surpassing the consensus estimate of $6.55.
Furthermore, Wallmart is set to execute a 3-for-1 stock split next week, indicating management's confidence in the company's prospects.
With successful initiatives in e-commerce and advertising, Wallmart appears to be in a robust position, suggesting continued upward momentum in the future.
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