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An Overview of Walmart’s Global Reach
With over 10,600 outlets in 27 countries, Walmart Inc (NYSE:WMT) stands as a global retail giant, catering to almost 255 million shoppers on a weekly basis. The firm is recognized as the world's biggest employer, boasting 2.1 million employees worldwide. In the United States alone, Walmart employs 1.6 million individuals, making it the nation’s top employer. Moreover, it is the biggest grocery chain in the U.S., outpacing Costco Wholesale (NASDAQ:COST) and Kroger Company (NYSE:KR). The company also benefits significantly from a robust dollar being the country's top importer. The pre-split stock value hit a peak in the $180s before undergoing a 3-for-1 split on February 26, 2024. With the shares now a third of their prior value, is this the right moment to invest in the Walmart stock?
Constant Growth Despite Size
In spite of its massive size, Walmart continues to witness year-on-year sales growth, exceeding half a trillion dollars in 2023. For Q4 of fiscal 2024, the firm recorded an EPS of $1.80 versus $1.64, a 10% improvement. Revenues climbed to $173.4 billion, exhibiting a 5.7% YoY increase. The consolidated gross margin is anticipated to grow by 39 bps owing to the betterment at Walmart U.S. Moreover, Global e-commerce sales exhibited a 23% YoY growth.
Setting Higher Standards
Walmart’s guidance for fiscal Q1 2025 EPS is estimated between $1.46 and $1.56 against a $1.60 consensus analyst estimate. The projected revenues for Q1 2024 are expected to increase by 4% to 5% YoY to $158 billion to $160 billion. The company's fiscal full-year 2025 revenues are expected to grow 3% to 4% YoY to between $667.6 billion and $674.1 billion.
Expanding Internationally
A surge in transaction counts and unit volume have resulted in market share gains in the U.S. and foreign markets. Walmart's international sales surpassed $100 billion in 2023. The firm recorded two record-breaking volume days during the holiday season of 2023. Store-fulfilled delivery sales exhibited a 50% YoY rise. Higher-income households have also contributed to share gains through deliveries.
Coping With Economic Challenges
Despite economic unpredictability, Walmart continues to witness customer resilience. The firm has seen an increase in the sales of apparel and hardlines, and is set to remodel 928 stores and clubs worldwide in the coming year. CEO Doug McMillon commended the team's strong performance and emphasized the firm's commitment to lowering customer prices.
Acquisition of VIZIO
In a surprise move, Walmart announced the acquisition of smart TV manufacturer VIZIO Holding (NYSE:VZIO). This brings to it VIZIO’S proprietary SmartCast operating system (O/S) and its 18 million active accounts. The all-cash deal amounted to $2.3 billion. This acquisition is expected to reinvigorate Vizio’s sales and boost Walmart's ad business.
Future Outlook
The daily candlestick chart for WMT features a rising wedge pattern, which typically indicates a reversal pattern. This is usually an indication that the channel of higher highs and lower lows is beginning to tighten. Pullback support levels have been identified at $58.00, $56.25, $53.29, and $50.52.
