Big blue gets bigger.
Walmart’s advertising business grew to $4.4 billion in its most recent fiscal year, increasing 27% year over year, according to the company’s most recent quarterly earnings. In the fourth quarter, Walmart’s global advertising business grew 29%, with Walmart Connect growing 24% in the US.
Its ad business, though, is still just a fraction of the company’s overall revenue. In its last fiscal year, Walmart posted revenue of $681 billion, up more than 5% YoY.
So what? Retailers like Walmart and Target make a lot of money selling ads by turning their e-commerce websites and in-store experiences into ad networks. Those retail media networks are expected to account for about a quarter of all US media spend, or $130 billion, by 2028, according to eMarketer.
The retailer is continuing to expand its ad footprint. In December, Walmart completed its $2.3 billion acquisition of Vizio, which executives said will help power its advertising business.
“Vizio will help us serve customers in new ways to enhance their shopping journeys while also creating new opportunities for advertisers to connect with customers and boost product discovery, empowering brands to realize greater impact from their advertising spend with Walmart,” John David Rainey, EVP and CFO of Walmart, told investors Thursday.
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What else stood out from the call:
On weight loss drugs: “We saw mid-teens growth in health and wellness, largely due to GLP-1 sales,” Rainey said.
On tariffs: “Tariffs are something we’ve managed for many years and we’ll just continue to manage that,” Walmart CEO and president Doug McMillon said. “We can’t predict what will happen in the future, but we can manage it really well.”
On inflation (and egg prices): “There will always be some anomalies, like what we’re seeing right now with eggs as a result of avian flu last fall,” John Furner, president and CEO of Walmart US, said. “Those things tend to work themselves out over time, so we don’t have a large inflation number planned into this year.”
On consumer confidence: “We see a consistent, resilient consumer,” Furner said.
Zoom out: For the first time, Walmart fell behind Amazon in total revenue. Its ad business is still well behind the e-commerce juggernaut’s own retail media network, which generated $56 billion in ad revenue last year.
All eyes are now on Target, which is set to share its earnings on March 4. Its Roundel ad network saw “mid-teen growth” in Q3 2024, but the company hasn’t fully disclosed the size of its ad business yet.
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