Walmart Earnings Soar As Shoppers Turn To Cheap Goods

U.S. retailers began reporting their quarterly results on Tuesday, and Walmart’s performance is impressive

After the retail behemoth announced a 9% dividend hike—the most significant increase in almost a decade—and an optimistic yearly sales outlook, its shares surged 6.5% to a record high of $181.35.

A barrier to the widespread slowdown has been Walmart’s emphasis on groceries compared to competitors like Target. Experts claim that the company’s size offers it bargaining strength with suppliers, allowing it to keep grocery prices low and attract customers from all income levels.

Despite substantial price reductions in the third quarter, the corporation announced offering even more food product discounts in the fourth quarter at its U.S. locations. On a conference call, the business announced that pricing in specific categories, such as hard goods and clothing, is lower than a year or two ago.

Meanwhile, in electronics, Walmart made a $2.3 billion acquisition of smart-TV manufacturer Vizio and reported robust fourth-quarter sales as inflation-squeezed consumers flocked to its stores.

“With the Vizio deal, Walmart Connect goes from being an ad provider through stores and websites to one that can penetrate consumers’ homes via television,” stated Neil Saunders, Managing Director of GlobalData.

Sensor Tower stated that by acquiring Vizio, Walmart gains access to Vizio’s SmartCast operating system, which allows for streaming ad-supported content on its devices and viewership statistics from thousands of smart TVs. According to the analysts at Stephens, that company made over $600 million in 2023.

According to Walmart CEO Doug McMillon, the company achieved a new milestone in 2023, surpassing $100 billion in global e-commerce sales. This was made possible through the company’s efforts to upgrade its vast stores, increase its online merchandise selection, and provide more pickup and delivery options.

Walmart’s total U.S. comparable sales (excluding fuel) increased by 4% for the quarter ending January 31. The company exceeded expectations; shares of adjusted profit came in at $1.80, while estimates were for $1.65.