Walmart beats Wall Street’s holiday expectations as e-commerce sales soar

• Walmart beat holiday-quarter earnings and revenue expectations.
• The retailer also said it would acquire TV maker Vizio for $2.3 billion.
• Walmart has weathered high inflation better than many other retailers.

A Walmart store in Atlanta on Feb. 19, 2023.

Walmart said Tuesday that quarterly revenue rose 6%, as shoppers turned to the big-box retailer throughout the holiday season and the company’s global e-commerce sales grew by double digits.

The retail giant also announced Tuesday that it would acquire smart TV maker Vizio to accelerate growth of its advertising business. Walmart is acquiring the company for $2.3 billion, or $11.50 per share.

In a CNBC interview, Chief Financial Officer John David Rainey said customers have still shown discretion with purchases. They are putting fewer items in their baskets but shopping more frequently, he said. Electronics, TVs, computers and some other expensive items have been a tougher sell, Rainey added.

Yet, he said even after the holiday rush, Walmart saw continued sales strength.

Here’s what Walmart reported compared with what Wall Street was expecting, based on a survey of analysts by LSEG, formerly known as Refinitiv:

• Earnings per share: $1.80 adjusted vs. $1.65 expected
• Revenue: $173.39 billion vs. $170.71 billion expected

In the three-month period that ended Jan. 31, Walmart’s net income fell to $5.49 billion or $2.03 per share, compared with $6.28 billion, or $2.32 per share, in the year-ago period.

Revenue increased from $164.05 billion in the year-ago period.

Walmart said it expects consolidated net sales to rise 4% to 5% in its fiscal first quarter. It also anticipates adjusted earnings of $1.48 to $1.56 per share on a pre-stock split basis.

For its fiscal 2025, the retailer expects consolidated net sales will climb 3% to 4%. Walmart anticipates adjusted earnings will be $6.70 to $7.12 per share on a pre-stock split basis.

Walmart has weathered high inflation better than many other retailers. It has used its value reputation to draw in families across income levels and has leaned into new ways to make money, such as selling ads, expanding its third-party marketplace and offering a subscription-based program called Walmart+.

Comparable sales, an industry metric also known as same-store sales, rose 4% for Walmart U.S. At Sam’s Club, comparable sales increased 1.9%, including fuel.

Global e-commerce sales jumped 23% year over year, topping $100 billion in total. In the U.S., e-commerce rose 17% as shoppers used curbside pickup and got orders delivered to their homes.

Advertising has been a fruitful business for Walmart, too. It grew about 33% globally and 22% in the U.S. year over year.

Rainey said the Vizio acquisition will be “an accelerant” for the “high-margin, fast-growing part of our business.”

In the U.S., customer transactions increased 4.3% compared with the year-ago period. However, average ticket, or the amount that a customer spent, declined slightly.

On its fiscal third-quarter earnings call in November, Walmart CEO Doug McMillon said the company could soon face a deflationary environment, where prices are not just stabilizing, but going down. He said those lower prices could help customers pay for more discretionary items.

On Tuesday, however, Rainey said Walmart sees deflation as less likely now. In some categories of general merchandise, prices are lower than a year ago.

Yet, he added, food prices still rose by low single digits year over year.

“The possibility overall [of deflation] still remains, but prices are more stable than where they were three months ago,” he said.

As many other companies have announced cost cuts, Walmart has done the opposite. It announced in late January that it would open or expand more than 150 stores in the U.S. over the next five years. That’s on top of an aggressive plan to upgrade more than 1,400 of its existing Walmart stores to have a more modern look.

Along with those store investments, Walmart said it would raise store manager wages to an average of $128,000 per year and make managers eligible for a bonus of up to 200% of their base salary.

It also announced a 3-for-1 stock split in late January, as shares hovered near an all-time high.

Shares of Walmart closed Friday at $170.36, up about 8% so far this year. The stock has outperformed the S&P 500, which rose about 5% during the same period.

This story is developing. Please check back for updates.