Walmart’s booming ad business provides ‘flexibility’ amid tariff impact
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Walmart’s booming ad business provides ‘flexibility’ amid tariff impact
Walmart’s global advertising business, which now includes the connected TV (CTV) maker Vizio, increased revenue 46% year over year in Q2. Walmart Connect, its U.S.-focused retail media arm, was up 31% versus the year-ago period. The company raised its full-year guidance around the report and said it expects net sales to increase between 3.75% to 4.75%, up from a prior 3-4% outlook.
For retailers, bets on digital advertising are increasingly important profit drivers amid trade war shocks that are driving up prices. Walmart’s approach has been to keep prices “as low as we can for as long as we can,” according to executives, though more middle- and lower-income households are starting to show behavioral change when it comes to discretionary spending.
“From a business model point of view, the fact that we have businesses like advertising and membership growing obviously help with flexibility as it relates to when we decide to absorb part of the tariff cost increase,” said Walmart CEO Doug McMillon on a call discussing the retailer’s fiscal Q2 results with analysts. McMillon later described growing newer business segments like advertising as “obviously key.”
Walmart’s global advertising business, which now includes the connected TV (CTV) maker Vizio, increased revenue 46% year over year in Q2, according to a company earnings statement. Walmart Connect, its U.S.-focused retail media arm that does not yet account for Vizio, was up 31% versus the year-ago period.
Walmart acquired Vizio last year for $2.3 billion and the advantages of the deal, which adds to the retailer’s troves of data and deepens its capabilities around video, are starting to become apparent. Retail media and CTV have experienced an accelerated convergence this year as the former channel tries to branch out into upper-funnel advertising territory and advertisers work to inject more performance into premium video, typically a brand-building tool.
On the earnings call, Walmart executives also described how improvements in e-commerce, including traction for membership service Walmart+, are complementing advertising growth. E-commerce sales jumped 26% YoY in the U.S. and 25% globally during the quarter. The company raised its full-year guidance around the report and said it expects net sales to increase between 3.75% to 4.75% versus a prior 3% to 4% outlook.