CEO Doug Mcmillon Tells Jim Cramer He Foresees Bright Future For Walmart's Advertising Business: 'We Can Connect The Dots'

In a recent interview with Jim Cramer, Walmart Inc WMT CEO Doug McMillon expressed his confidence in the company’s advertising sector. This comes after the retail giant’s strong performance in the digital and e-commerce space.

What Happened: McMillon, in a conversation with Cramer, highlighted the unique advantages that Walmart holds in the advertising domain, reported CNBC. He pointed out that the company’s expanding digital reach, coupled with the growth of its e-commerce business, presents a lucrative opportunity for advertising sales.

"When you grow your digital reach, and you've got an e-commerce business that's scaling like ours is," McMillon said.

"You get an opportunity to sell advertisements, and we can connect the dots for advertisers."

McMillon revealed that Walmart’s global advertising business witnessed a 28% increase over the year. The company’s e-commerce sales also surpassed $100 billion for the first time. To further bolster its advertising business, Walmart announced the acquisition of TV manufacturer Vizio for $2.3 billion.

"If [advertisers] advertise with a digital ad, for example, and a customer transacts a week later in a store or club, we can connect that up for them and let them know that the ad really worked," McMillon said.

"That's the differentiating advantage that we've got."

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The CEO attributed Walmart’s success to its extensive reach and its ability to accurately measure the effectiveness of advertisements. He also acknowledged the company’s ability to attract and retain customers across various income brackets, as well as its focus on convenience.

Why It Matters: McMillon’s optimistic outlook on Walmart’s advertising business follows a series of strategic moves and strong financial performances by the retail giant. Earlier this year, Walmart reported better-than-expected holiday sales, including two record-breaking volume days leading up to Christmas. This was seen as a testament to the company’s resilience in the face of inflation and supply chain challenges.

Walmart’s Q4 earnings report also impressed analysts, with Goldman Sachs’ Kate McShane reiterating a Buy rating on the company’s stock. The report showed a fourth-quarter adjusted EPS of $1.80, surpassing both McShane and Wall Street consensus estimates.

McMillon’s leadership has been pivotal in Walmart’s journey. His remarkable rise from unloading trucks at a Walmart distribution center as a teenager to becoming the company’s CEO has been a source of inspiration for many. His dedication to the company and his strategic vision have played a crucial role in Walmart’s continued success.

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Walmart Photo by Sundry Photography on Shutterstock