Walmart’s U.S. advertising arm, Walmart Connect, grew revenue 41% year over year in Q4, an important period that includes the holidays, according to an earnings statement. The retailer saw global advertising revenue rise 46%, reaching nearly $6.4 billion, for the full fiscal year.
Advertising and membership fees, two high-margin segments, accounted for a third of Walmart’s operating income in Q4. Asked by analysts about whether the company can sustain its rate of advertising expansion, executives reinforced they see a large opportunity for growth ahead.
“We still have long ways to go here to get in the neighborhood of some of the best-in-class competitors,” CFO John Rainey said on an earnings call. “We feel like we can improve our own advertising capabilities while doing it on a growing base, which gives us a lot of runway into the future.”
For one thing, Walmart is drawing more demand from its marketplace targeted at third-party sellers versus first-party brands, Rainey explained. Another factor is Vizio, the connected TV device maker that Walmart acquired two years ago for $2.3 billion. Vizio is working off a smaller base than the overall U.S. business, but provides Walmart an avenue into video as more retail media networks try to stand up full-funnel marketing ecosystems.
“We saw triple-digit growth in advertising with our Vizio business in the quarter,” Rainey said. “This is exciting because it gives us yet another channel to market to our customers. And I feel like that’s really just getting started.”
Walmart has made structural changes to support its advertising bets and replicate its success playbook outside of the U.S., along with account for the rise of new technology like agentic commerce. In January, it promoted Seth Dallaire to chief growth officer overseeing Walmart Connect, Walmart+, Walmart Data Ventures, Vizio and the global marketplace platform.
“I think that signals confidence that the capabilities we have built in the U.S. are exportable to other markets, and we can work with our other markets to accelerate these platforms to grow,” said CEO John Furner, who took on the top job earlier this month, of Dallaire’s appointment. “We’re optimistic that what Seth has done here in the U.S. with his team can accelerate growth in other markets additionally.”
Total revenue in Q4 climbed 5.6% YoY to $190.7 billion while Walmart’s e-commerce sales jumped 24% for the end-of-year period. Walmart, which beat analyst estimates on earnings and revenue, has continued to attract more higher-income shoppers as U.S. consumers grapple with economic pressures. Recent marketing campaigns have tried to combat stodgier perceptions of the retailer, emphasizing its wide assortment and deals with celebrity-studded ads. That said, the big-box store shared a cautious outlook, expecting net sales to rise between 3.5% to 4.5% for the current fiscal year.
