Dive Brief:

• Walmart’s Q4 2024 revenue grew 4.1% to $180.6 billion, while fiscal year revenue grew 5.1% to $681 billion, per the company’s latest earnings report.
• The retailer’s global advertising business grew 29% in the quarter, including 24% for Walmart Connect in the U.S., and grew 27% to $4.4 billion on the year.
• The acquisition of Vizio, which closed in December, is expected to create new opportunities for advertisers and could provide another boost to the company’s growing ad business.

Dive Insight:

Walmart’s strong fourth quarter exceeded expectations, but the retailer still issued a modest outlook as uncertainties surround consumer behavior and economic and geopolitical conditions, CFO John David Rainey explained on an earnings call. However, the retailer’s advertising business growth shows no signs of slowing and is helping buoy revenue as other parts of the business deal with tighter margins.

“If you just take advertising and membership, just those two categories, that was a little more than a quarter of the overall operating income for us in the quarter,” Rainey said on the call.

Walmart’s global ad business grew to $4.4 billion in 2024, with a 27% growth rate in line with the previous year’s figure (28% to $3.4 billion). While the growth rate is encouraging, the retailer’s ad business still has a ways to go to match its competitors: Amazon’s ad revenue surpassed $56 billion last year, the first year in which ads ran on Prime Video.

To that point, Walmart is working to integrate Vizio into its operations after completing the acquisition for the TV maker in December, a move that anticipated a greater convergence of retail media and connected TV. The retailer expects the addition of Vizio and its SmartCast Operating System to its portfolio of advertising capabilities to help boost product discovery and provide brands with greater impact for their ad spend with the company.

“I'm just really pleased with the way it works for the Walmart Connect business to have more ways to distribute advertising for sellers and suppliers, that's really exciting for them. And we hope to be able to do that in a very efficient way,” said President and CEO of Walmart U.S. John Furner on the earnings call. 

Apart from its advertising business, Walmart’s continued shift from brick-and-mortar sales to e-commerce is changing the company’s cost profile, which affects its own advertising. E-commerce now represents 18% of Walmart’s business, and moving to more digital sales changes the “channel mix equation,” Rainey explained on the call.

“We have an opportunity to make investments in the business as well,” the executive said. “If you look at the fourth quarter, marketing is an area that stands out that we invested a little bit more heavily into.”

To that end, Walmart in January unveiled an update to its visual identity that is meant to embrace the growing role that digital and cross-channel capabilities have for its business as it seeks to become a more “modern, culturally dynamic brand.”