Walmart (NYSE:WMT) is poised to maintain its upward trajectory in sales, with reports indicating its exploration of a buyout of Vizio, a prominent TV maker and video platform. The retail giant is scheduled to unveil its fourth-quarter results on Tuesday, with expectations of a 3.2% surge in US same-store sales, a notable decline from the 8.8% growth recorded during the same period last year.
Foot traffic in Walmart stores experienced a slight dip of 1.1% in Q4, yet showed signs of improvement towards the end of December, turning positive in January, according to data from Placer.ai. The surge in sales throughout the fiscal year, particularly driven by higher-income consumers gravitating towards Walmart for groceries, is anticipated to lead to a 5.35% increase in US same-store sales for the full fiscal year.
Bank of America analyst Robert Ohmes highlighted the sustained momentum, stating, “We expect grocery share gains & trade-down to continue supporting Walmart’s store and online transactions as consumers continue to manage grocery inflation.”
As Walmart gears up to unveil its earnings report, industry experts are closely monitoring its strategies in the grocery sector and potential shifts toward discretionary spending. Additionally, investors are keeping an eye on the possibility of operating profits outpacing sales growth, indicating potential margin expansion.
The anticipation surrounding Walmart’s financial performance coincides with its strategic endeavors in the digital realm. In a bid to rival Amazon Prime, Walmart is reportedly in negotiations to acquire Vizio for $2 billion, aiming to leverage TV viewership data for targeted marketing and bolstering its e-commerce presence through connected TV platforms.
Analysts suggest that the acquisition could significantly enhance Walmart’s ecosystem, particularly its Walmart+ membership platform, by providing valuable consumer data. However, concerns loom regarding the proposed acquisition’s impact on competitors such as Costco, Target, and Best Buy, who also retail Vizio TVs.
Despite potential risks, Walmart has a history of venturing into bold acquisitions to bolster its digital capabilities. JPMorgan analyst Chris Horvers views this move as indicative of Walmart’s commitment to learning and growth in the digital space.
The anticipated earnings breakdown for Walmart’s Q4 includes expected revenues of $170.66 billion and adjusted EPS of $1.65. Notable figures include a projected 3.12% same-store US sales growth and a robust 15.49% e-commerce growth for Walmart US.
Looking ahead to fiscal 2024, Bloomberg consensus data forecasts revenue of $644.83 billion and adjusted EPS of $6.49 for Walmart. Expectations remain optimistic with a projected 5.16% same-store US sales growth and a substantial 20.59% e-commerce growth for Walmart US.
Featured Image: Unsplash
