Walmart reports strong revenue growth of 5.7% with operating income growing faster at 30.4%; adjusted operating income up 13.2%

Rhea-AI Summary

Walmart Inc. reports impressive fourth-quarter and full-year financial results with consolidated revenue growth, increased operating income, and strong eCommerce sales. The company also announces a 9% raise in annual dividend and plans to acquire VIZIO HOLDING CORP to boost Walmart Connect in the U.S.

Positive

• Consolidated revenue for the fourth quarter reached $173.4 billion, up 5.7% year-over-year
• Global eCommerce sales grew by 23% in the fourth quarter
• Consolidated operating income increased by $1.7 billion, or 30.4%
• Adjusted EPS for the fourth quarter was $1.80
• Company raised its annual dividend by 9%
• Walmart agrees to acquire VIZIO HOLDING CORP. to enhance Walmart Connect in the U.S.
• Full-year consolidated revenue was $648.1 billion, up 6.0%
• Global advertising business grew by approximately 28% to $3.4 billion
• ROA at 6.6% and ROI at 15.0%, up 230 basis points
• GAAP EPS for the full year was $5.74, while Adjusted EPS was $6.65

Negative

• None.

Insights

Financial Analyst

The announcement of a 23% increase in global eCommerce sales, surpassing $100 billion, is a robust indicator of the company's growth trajectory and its ability to capitalize on the digital retail trend. The rise in gross margin rate by 39 basis points suggests an improvement in cost efficiency or pricing strategy, particularly within Walmart U.S. This is a positive signal for investors, as it reflects better profitability per unit of sales.

Moreover, the 9% increase in annual dividend is a strong commitment to shareholder returns, likely to appeal to income-focused investors. The adjusted EPS of $1.80, excluding effects from equity and other investments, provides a clearer picture of operating performance, which, in this case, appears solid given the reported increase in adjusted operating income by 13.2%. The company's forward-looking statements, including the outlook for Q1 and FY25, are crucial for investors as they provide guidance on expected performance and strategic direction.

Market Research Analyst

The growth in Walmart's global advertising business, particularly the 33% increase and the acquisition of VIZIO HOLDING CORP., indicates an aggressive push into the advertising space. This move is significant as it diversifies revenue streams and taps into the high-margin digital advertising market. For the industry, this reflects a trend where traditional retailers are increasingly competing with tech companies for advertising dollars.

The 23% growth in global eCommerce aligns with the broader market trend of increasing online sales and highlights the company's successful adaptation to consumer behavior changes. However, it's important to scrutinize how this growth compares to competitors and whether it's sustainable in a post-pandemic environment where physical retail may regain some ground.

Economist

An increase in consolidated revenue by 6.0% and operating income by 32.2% indicates a strong economic position for the company, likely reflecting both operational efficiencies and consumer spending patterns. The reported return on assets (ROA) of 6.6% and return on investment (ROI) of 15.0% are significant metrics that suggest effective use of assets and capital investments. A 230 basis points improvement in ROI is particularly noteworthy, as it may indicate strategic investments and asset optimizations that outperform industry norms.

Additionally, the positive effect of currency fluctuations and LIFO (last-in, first-out) accounting suggests that external economic factors and inventory management strategies have favorably impacted the company's financials. It's imperative to consider these factors in light of global economic conditions, such as currency volatility and inflationary pressures, which could affect future performance.

eCommerce up 23% globally, surpassing $100 billion for the year

GAAP EPS of $2.03; Adjusted EPS of $1.80

Company provides outlook for Q1 and FY25

Company raises annual dividend 9%

BENTONVILLE, Ark.--(BUSINESS WIRE)-- Walmart Inc. (NYSE: WMT):

Fourth-quarter highlights:

• Consolidated revenue of $173.4 billion, up 5.7%, or 4.9% (cc)
• Consolidated gross margin rate up 39bps due to improvement at Walmart U.S.
• Consolidated operating income up $1.7 billion, or 30.4%; adjusted operating income up 13.2%, positively affected by currency and LIFO of 2.3% and 1.0%, respectively
• Global eCommerce sales grew 23%
• Global advertising business grew approximately 33%, including 22% for Walmart Connect in the U.S.
• Adjusted EPS of $1.80 excludes the effect, net of tax, from a net gain of $0.23 on equity and other investments
• Walmart agrees to buy VIZIO HOLDING CORP. to further accelerate Walmart Connect in the U.S.

Full year highlights:

• Consolidated revenue of $648.1 billion, up 6.0%, or 5.5% (cc)
• Global advertising business grew approximately 28% to reach $3.4 billion
• Consolidated operating income up $6.6 billion, or 32.2%; adjusted operating income up 10.2%, growing faster than sales
• ROA at 6.6%; ROI at 15.0%, up 230 bps
• GAAP EPS of $5.74; Adjusted EPS of $6.65

The company will hold a live conference call with the Investment Community at 7 a.m. CST Tuesday, Feb. 20, 2024, to discuss the company’s fourth quarter earnings results for fiscal year 2024. The event will be webcast live and is accessible by visiting https://corporate.walmart.com/news/events and selecting the Fourth Quarter Earnings Release event. The webcast will be archived and available on the company website.

About Walmart

Walmart Inc. (NYSE: WMT) is a people-led, tech-powered omnichannel retailer helping people save money and live better - anytime and anywhere - in stores, online, and through their mobile devices. Each week, approximately 255 million customers and members visit approximately 10,500 stores and numerous eCommerce websites in 19 countries. With fiscal year 2024 revenue of $648 billion, Walmart employs approximately 2.1 million associates worldwide. Walmart continues to be a leader in sustainability, corporate philanthropy, and employment opportunity. Additional information about Walmart can be found by visiting corporate.walmart.com, on Facebook at facebook.com/walmart, on X (formerly known as Twitter) at twitter.com/walmart, and on LinkedIn at linkedin.com

View source version on businesswire.com: https://www.businesswire.com/news/home/20240219441762/en/

Investor Relations Contacts

Steph Wissink

Senior Vice President, Investor Relations

ir@walmart.com

Kary Brunner

Sr. Director, Investor Relations

Media Relations Contact

Kasey Anderson

Director, Global Communications

800-331-0085

Source: Walmart Inc.

FAQ

What was Walmart's consolidated revenue for the fourth quarter?

Walmart's consolidated revenue for the fourth quarter was $173.4 billion, up 5.7% year-over-year.

By how much did Walmart's Global eCommerce sales grow in the fourth quarter?

Walmart's Global eCommerce sales grew by 23% in the fourth quarter.

What was Walmart's Adjusted EPS for the fourth quarter?

Walmart's Adjusted EPS for the fourth quarter was $1.80.

How much did Walmart raise its annual dividend by?

Walmart raised its annual dividend by 9%.

What is Walmart's full-year consolidated revenue?

Walmart's full-year consolidated revenue was $648.1 billion, up 6.0%.

What was Walmart's GAAP EPS for the full year?

Walmart's GAAP EPS for the full year was $5.74.

What acquisition did Walmart agree to make to enhance Walmart Connect in the U.S.?

Walmart agreed to acquire VIZIO HOLDING CORP. to boost Walmart Connect in the U.S.