Consumer / Retail
World's largest retailer by revenue with growing e-commerce and advertising businesses.
View forensic reportOperating margin expanded another 40 basis points in Q4 2024, driven by Walmart Connect advertising and marketplace fulfilment. Our prior thesis is validated and upgraded.
Both trade at premium multiples, but Walmart's advertising-driven margin expansion and accelerating dividend growth create a widening capital allocation advantage over Costco's consistency.
Operating income grew 41% while revenue grew 5%. Walmart Connect, the third-party marketplace, and Walmart+ are transforming a low-margin grocer into a high-margin platform — and the data shows it clearly.
Costco at 53x earnings commands a 40% premium over Walmart at 38x. With faster margin expansion, a $5 billion ad business, and 2.5x the net income, Walmart gets our vote.
A $5 billion ad business growing 30%, a membership programme with 25 million subscribers, international operations that finally work, and 52 years of consecutive dividend increases.
Walmart's operating margin expanded from 3.9% to 4.5% while revenue grew to $674 billion. The data tells a story of a retailer transforming into something more valuable.