Walmart said Tuesday that quarterly earnings increased by 6%, as consumers turned to the big-box retailer throughout the holiday season, and the firm’s international e-commerce sales rose by double digits.
Acquisition of Vizio:
Walmart announced its acquisition of smart TV maker Vizio for $2.3 billion, aiming to boost its advertising business. The purchase reflects Walmart’s strategic intent to diversify its revenue streams and capitalize on the growing demand for smart home entertainment devices.
Customer Shopping Behavior:
Chief Financial Officer John David Rainey noted that customers are showing discretion in their purchases, opting for fewer items but shopping more frequently. High-ticket items like electronics, TVs, and computers have faced challenges in sales despite continued demand in certain segments.
Financial Results:
Walmart’s financial performance surpassed Wall Street expectations:
- Earnings per share: $1.80 adjusted vs. $1.65 expected
- Revenue: $173.39 billion vs. $170.71 billion expected
However, net income for the three-month period ending January 31 decreased to $5.49 billion, compared to $6.28 billion in the previous year. Despite this, revenue increased from $164.05 billion in the year-ago period.
Future Outlook:
Walmart expects consolidated net sales to rise by 4% to 5% in its fiscal first quarter, with adjusted earnings projected to range from $1.48 to $1.56 per share.
For fiscal 2025, the retailer anticipates a 3% to 4% increase in consolidated net sales, with adjusted earnings expected to be $6.70 to $7.12 per share.
Resilience Amid Inflation:
Walmart has navigated high inflation successfully, leveraging its value proposition to attract customers across income levels.
The company has diversified its revenue streams through initiatives such as selling ads, expanding its third-party marketplace, and offering subscription-based services like Walmart+.
Comparable Sales Performance:
Comparable sales, a key industry metric, rose by 4% for Walmart U.S. and by 1.9% for Sam’s Club, including fuel. These figures demonstrate Walmart’s ability to maintain solid sales growth despite evolving market conditions.