Accounting

Walmart’s $2.3b bet to gain more eyeballs

The mega-retailer announced its purchase of smart TV maker Vizio as it beat earnings forecasts.
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There are more than 90 discounts on energy drinks at Walmart.com right now. We mention this because the retailer has been on such a tear that we’ve wondered whether the C-suite has been pounding the discounted caffeine before meetings.

It was just a few weeks ago, after all, that it announced back-to-back plans for a stock split and opening 150 new stores. Then on Tuesday, as it reported strong 2023 holiday sales, the world’s largest retailer said it was growing its advertising business with the $2.3 billion purchase of smart TV maker Vizio.

In its year-end earnings report, the behemoth from Bentonville outperformed the consensus forecast for quarterly earnings per share ($1.80 vs. $1.65) and revenue ($173.4 billion vs $170.7 billion), according to an analyst survey by LSEG, CNBC reported. Its quarterly revenue grew 5.7%, and 6% for all of 2023, as shoppers—seeing ever-higher prices and the kind of interest rates that make it even more painful to carry a credit card balance—turned increasingly toward budget-friendly retailers, Business Insider reported.

While the company has been growing its online shopping business—CEO Doug McMillon said in an earnings release that 2023 e-commerce sales topped $100 billion for the first time—the Vizio deal shows its dedication to building up other sources of revenue, including its Walmart Connect advertising business.

Rebranded in 2021, Walmart Connect sells placement on screens in Walmart stores and in search results across Walmart.com, its shopping app, and in online display ads. Buying Vizio gives it another screen to sell ads on—more than 18 million smart TV accounts’ worth of screens, according to its press release.

News built for finance pros

CFO Brew helps finance pros navigate their roles with insights into risk management, compliance, and strategy through our newsletter, virtual events, and digital guides.