Driven by growth in online sales, Walmart exceeds expectations and climbs on Wall Street

(BFM Bourse) – The largest distributor in the world published revenues up 5.7% year-on-year, well above consensus. The group, however, expects a slowdown in the first quarter.

If the great wave of publications has passed on Wall Street, a few heavyweights have yet to reveal their accounts. This will particularly be the case for Nvidia on Wednesday evening. This Tuesday, the American distribution giant Walmart communicated its results for the fourth quarter, ended at the end of January.

For now, the company is satisfying investors, with the stock rising 3.5% on Wall Street at 5:45 p.m. French time.

The distributor recorded an increase in revenue of 5.7% year-on-year and 4.9% excluding currency effects, to reach a total of $173.4 billion. According to a consensus cited by Bank of America, the consensus was for $170.465 billion.

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Caution about the outlook

The company was supported by growth in online sales, which increased 23% year-over-year in the fourth quarter. Over the whole of 2023, these sales exceeded $100 billion (out of a total of $648.1 billion).

The increase in sales in the United States excluding fuels stood at 4% compared to an increase expected by analysts of 3%.

Data followed by analysts, earnings per share stood at $1.80 in the fourth quarter, against a consensus of $1.64 per share.

The company is, however, a little cautious in its forecasts. For the first quarter of its staggered 2024-2025 financial year, the group expects growth ranging from 4% to 5% excluding currency effects, knowing that the group benefits from a positive calendar impact of around 1 point of percentage.

As for the entire 2024-2025 financial year, the group anticipates an increase in its revenues of between 3% and 4% excluding currency effects. Walmart also expects earnings per share of between $6.7 and $7.12 per share, which is lower (in the middle of the range) than the figure of $7.09 anticipated by the consensus cited by Bloomberg.

Chief Financial Officer John David Rainey told Bloomberg that consumers were becoming more selective in their purchases. They spend less per visit but visit stores more often, he added. The manager also indicated that the group was gaining market share in all product categories.

According to a presentation posted online by the company, these market share gains in the United States were mainly concentrated among “high-income” households.

Stock buybacks and corporate buyouts

The company also announced that it would return $3 billion in cash to its shareholders, half through a dividend and half through share buybacks.

Alongside these results, Walmart announced the purchase of television manufacturer Vizio for $2.3 billion in equity value. With this acquisition, Walmart wants to offer its customers connected television and entertainment services, while generating new sources of advertising revenue, the group argued in its press release.

Thanks to this external growth operation, Walmart Connect, a provider of advertising via stores and websites, can penetrate consumers’ homes via television. This multi-channel approach gives Walmart much more power and reach in the world of advertising and places it on an equal footing with companies like Amazon,” explained Neil Saunders, analyst at GlobaData, quoted by AFP.

Julien Marion – ©2024 BFM Bourse

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