Shares of Walmart (WMT 3.23%) were moving higher Tuesday morning after it impressed investors with its fiscal fourth-quarter 2024 earnings report. The world’s largest retailer posted strong results that easily beat estimates, and also raised its dividend and announced a $2.3 billion acquisition of TV maker Vizio.
As of 11:44 a.m. ET, the stock was up 3.4%.
Image source: Walmart.
Walmart shines over the holidays
Walmart tends to outperform when times are tough and consumers are pinching pennies, and that pattern held true in its fiscal fourth quarter as consumers still coping with the lingering impacts of recent years’ high inflation turned to the discount retailer.
For the fiscal quarter, which ended Jan. 26, comparable sales at its Walmart U.S. business were up 4%, driving overall revenue up 5.7% to $173.4 billion, ahead of the consensus estimate of $158.4 billion. E-commerce sales growth remained strong, up 23% globally, and exceeding $100 billion in revenue for the year.
It also reported 33% growth in its global advertising business, tapping into a new revenue stream — one that has been quite profitable for rival Amazon.
Gross margin improved 39 basis points, which helped drive adjusted operating income up 13.2% to $7.25 billion. Adjusted earnings per share (EPS) rose from $1.71 to $1.80, which was also well ahead of analysts’ expectations at $1.53.
Management announced a 9% dividend increase to $0.83 per share. That’s a greater payout hike than usual for the company, and a sign of confidence in the business.
Finally, it’s buying Vizio to help accelerate its Walmart Connect advertising business.
“Our team delivered a great quarter, finishing off a strong year,” said CEO Doug McMillon. “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.”
Can Walmart keep climbing?
Looking ahead, the company said it expects revenue growth of 3% to 4% in fiscal 2025 and operating income growth of 4% to 6%. On the bottom line, it forecast $6.70 to $7.12 in pre-split adjusted EPS, up from $6.65 in fiscal 2024 and better than the consensus at $6.55.
Walmart is also executing a 3-for-1 stock split next week, another sign of management’s confidence. The company’s newer initiatives in areas such as e-commerce and advertising are paying off, and the business looks as strong as it ever has.
Walmart’s a good bet to keep moving higher from here.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Jeremy Bowman has positions in Amazon. The Motley Fool has positions in and recommends Amazon and Walmart. The Motley Fool has a disclosure policy.
