Walmart Is Going For Advertising Growth

On Wednesday, Walmart Inc (NYSE: WMT) didn’t fail to impress investors with its fourth quarter report while also revealing its strategy to further boost its growth on the ad front, like its retail peer, Amazon.com Inc (NASDAQ: AMZN). Walmart also proudly revealed its e-commerce sales passed the $100 billion milestone for the first time. Not surprisingly, Walmart’s shares are up more than 11% year-to-date.

Advertising Is Going Strong

Walmart CEO Doug McMillon emphasized Walmart’s unique advantages for advertisers. To connect the dots for advertisers, Walmart plans to acquire TV maker Vizio for $2.3 billion. Impressively, is global advertising rose 28% for the full year.

Walmart reported a great fourth quarter that wrapped up a strong year.

For the quarter ended on January 31st, Walmart reported revenue rose 6% to $173.39 billion, topping LSEG’s estimate of $170.71 billion. However, net income fell to $5.49 billion or $2.03 per share with adjusted earnings amounting to $1.80 per share, also topping LSEG’s estimate of $1.65.

E-commerce sales also did great, rising 23% YoY and topping $100 billion for the first time. In the U.S. alone, e-commerce sales rose 17%. Although the average ticket decreased slightly, customer transactions rose 4.3% compared to last year’s comparable quarter. These figures show that Walmart observed its sales kept going strong even after the ‘most wonderful time of the year’, the holidays season. 

Outlook

As for its fiscal first quarter, Walmart guided for consolidated net sales growth between 4% and 5%, with adjusted earnings of $1.48 to $1.56 per share on a pre-stock split basis.

As for the fiscal 2025, Walmart guided for consolidated net sales growth between 3% and 4%, with adjusted earnings between $6.70 and $7.12 per share, also on a pre-stock split basis.

Walmart has a good reason to be excited about its momentum.

Undoubtedly, Walmart navigated the high inflation better than many other of its retail industry peers by appealing to families across different income levels and diversifying its business. Like Amazon, Walmart is making a push into advertising, with Amazon also reporting an impressive 27% rise for its booming ad unit that brought in $14.7 billion during the latest reported quarter. Besides ad sales, Walmart’s latest results are also the result of its third-party marketplace expansion and its subscription-based program, Walmart+. Amazon also benefited from its Buy With Prime expansion to third party merchants that expanded its commercial power as well as from the evolution of its Prime subscription. By pursuing similar strategies, Walmart and Amazon weathered macroeconomic challenges far better than most of their peers

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