Walmart Makes 9% Increase to Annual Dividend
The board of directors at Walmart Inc. has approved an annual cash dividend for fiscal year 2025 of 83 cents per share on a post-stock split basis, or $2.49 per share on a pre-split basis. This represents an approximately 9% increase from the $2.28 per share paid for the last fiscal year, its largest increase in more than 10 years.
The news came as the largest U.S. retailer released its fourth-quarter and fiscal 2024 earnings. Walmart reported strong revenue growth of 5.7%, with operating income growing faster at 30.4%; adjusted operating income was up 13.2%.
Constant currency sales increased nearly 5%, or almost $8 billion, in Q4, led by increased transactions across in-store, club and e-commerce channels.
Store-fulfilled delivery sales were up nearly 50%, and the company reached a $2 billion monthly run rate. “Delivery has been a key source of share gains among upper-income households and is also the most productive channel for acquiring Walmart+ members,” said CFO John David Rainey during the company’s earnings call. “Sam's Club U.S. delivered comp-sales growth of 3.1%, excluding fuel, with strength in food, consumables and health categories.”
E-commerce sales in the United States increased 17%, and Walmart gained grocery share in both units and dollars. “E-commerce continues to be a key point of differentiation for Sam's, with delivery and curbside driving e-commerce growth,” said Rainey.
“Customers are responding as we continue to manage pricing to align to competitive historic price gaps,” he continued. “In addition, we had lower markdowns, resulting from strong inventory management, with Walmart U.S. inventory down 4.5%, Sam's down over 8%, and international relatively flat, excluding currency. This puts us in a good position to start the new fiscal year.”
As Walmart increasingly uses stores to fulfill e-commerce orders, it has lowered last-mile store-to-home delivery costs by about 20% in the past year, even as it shortened delivery times to same-day from around 90% of stores.
Adjusted earnings per share (EPS) for Walmart's Q4 reached $1.53, prompting the company to raise its full-year sales and EPS guidance to a range of 5.0% to 5.5% and $6.40 to $6.48, respectively.
Walmart had more big news on its earnings release date, confirming its plan to acquire TV maker Vizio for approximately $2.3 billion. According to Walmart, the acquisition will enable the company to connect with and serve its customers through innovative television and in-home entertainment and media experiences. The deal would also accelerate its Walmart Connect retail media business in the United States, by combining Vizio's advertising solutions business with Walmart’s reach and capabilities.
Walmart is also excited about its store growth in the United States. “Our supercenter store-of-the-future design is resulting in stronger four-wall sales while also delivering a sales lift in the surrounding trade area, as these modernized stores offer more capacity for pickup and delivery, are more engaging to shop, and are improving customer perception about Walmart, especially in general merchandise, where we're encouraged by the share gains we're seeing,” said Rainey.
Meanwhile, Walmart's full-year highlights include:
- Consolidated revenue of $648.1 billion, up 6.0%
- Consolidated operating income up $6.6 billion, or 32.2%; adjusted operating income up 10.2%, growing faster than sales
- ROA at 6.6%; ROI at 15.0%, up 230 basis points
- GAAP EPS of $5.74; adjusted EPS of $6.65
Each week, about 255 million customers and members visit Walmart’s approximately 10,500 stores and numerous e-commerce websites in 19 countries. The Bentonville, Ark.-based company employs approximately 2.1 million associates worldwide. Walmart U.S. is No. 1 on Progressive Grocer’s 2023 list of the top food and consumables retailers in North America. PG also named Walmart one of its Retailers of the Century.
