Walmart beats Q4 earnings to buy Vizio in $2.3 billion deal

Walmart confirmed it will buy smart TV maker Vizio as it reported another strong quarter of sales growth amid a slight pullback from U.S. consumers.

America's largest retailer reported fourth-quarter results on Tuesday that beat Wall Street expectations before the market opened. Consumers flocked to the retail chain, especially online, during the holiday season, with e-commerce sales growing 23% year-over-year to surpass $100 billion.

Shares of Walmart rose nearly 3% in premarket trading on Tuesday after the retailer raised its annual dividend by 9%.

CEO Doug McMillian said the company continued to gain share as it improved the customer experience amid the “high-volume days leading up to the holidays.”

Walmart US same-store sales rose 4.0% in the quarter, compared to Bloomberg consensus estimates of 3.12%. The rise was due to more shoppers visiting the store more often, but a slight decline in the average ticket meant they added less to their basket.

Ber, foot traffic to stores fell 1.1% in Q4, but improved in late December and turned positive in January. By late 2022, Walmart has seen an uptick in call traffic in recent years after consumers, especially higher-income shoppers, began flocking to the value retailer for groceries. Higher costs of inflation also benefited the company.

The company expects consolidated net sales to grow 4.0% to 5.0% in fiscal Q1 2025. Adjusted earnings per share are expected to be between $1.48 and $1.56 pre-split and between $0.49 and $0.52 post-split.

Walmart is investing more in digital, advertising

Walmart is officially ending Amazon Prime.

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The company announced plans to buy the maker of connected TV platform Vizio for $2.3 billion, or $11.50 per share. Walmart Connect, a retail media business that grew 22% year over year in the US, should accelerate this move.

That's a little more than $2 billion Wall Street Journal reported last week.

This would allow Walmart to “leverage TV audience data” to market its products across its ecosystems. It could offer direct e-commerce sales on the connected TV platform — “a huge opportunity” as consumers continue to cut the cord — and allow the retailer to gain more insight into its audience and customers, Wedbush analyst Alicia Rees wrote in a client note. Before notification.

As Walmart grows its ecosystem, particularly its Walmart+ membership base, consumer data is “very valuable,” Feldman said.

Walmart is “trying to create something like Amazon Prime; this might be a way to do that,” Feldman said. However, he's skeptical about the price Walmart is willing to pay, and what it means for other retailers that sell Vizio TVs, such as Costco, Target and Best Buy.

But Walmart has a track record of taking some risks with acquisitions, including (eventually shut down), Flipkart (still unprofitable), and Moosejaw and Bonobos (later resold).

It's another example of Walmart's “interest in learning and developing its digital capabilities. [being] Ready to take some flyers,” JP Morgan analyst Chris Harvers said in a note to clients.

Harvers doesn't believe the deal will cause antitrust concerns, as “consumer electronics is one of the most competitive markets in the world” and Walmart's private label TV brand “doesn't have anywhere near the share of Samsung, TCL, LG, etc.” “

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Customer in fresh produce aisle, salad bags vegetables, Walmart Supercenter, Miami, Hialeah Gardens, Florida.  (Photo: Jeffrey Greenberg/Universal Images Group via Getty Images)

A customer in the produce aisle of a Walmart Supercenter in Miami, Fla (Jeff Greenberg via Getty Images)

Revenue breakdown

Here's what Walmart reported in its Q4 results, compared to Bloomberg consensus data:

Revenue: $173.4 billion and $170.66 billion

Adjusted EPS: $1.80 and $1.65

Same-store US sales growth: Vs 3.4% vs. 3.2%

Walmart US Same Store Sales: 4.0% vs. 3.12%

Sam's Club US Same Store Sales Growth: 3.1% and 2.99%

Walmart US E-Commerce Growth: 17.0% and 15.49%

Here's what Walmart is expected to report in its 2024 fiscal year, according to Bloomberg consensus data:

Revenue: $648.1 billion and $644.83 billion

Adjusted EPS: $6.65 and $6.49

Same-store US sales growth: 6.0% and 5.35%

Walmart US Same Store Sales: 5.6% and 5.16%

Sam's Club US Same Store Sales Growth: 4.8% and 4.75%

Brooke DePalma is a senior reporter at Yahoo Finance. Follow her on Twitter at @Brooke DePalma Or send an email to [email protected].

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