Did you know Walmart’s advertising business accounted for about 30% of the company’s operating profit last year? Did you even know that Walmart has an advertising business?
That stunning fact, unknown to many people (including me), exemplifies the conclusion of a new McKinsey study, published today. In the report, “Inspired for Business Growth: How Five Companies Beat the Market,” researchers at the consulting firm examined how big companies grow both revenue and profits impressively over time—no easy task.
The study identified 61 companies that outperformed their peers from 2019 to 2024, including investment bank JPMorgan Chase; insurance company Progressive; ASML, the Dutch manufacturer of machines for making chips; and Builders FirstSource, a construction products and services company. This was, of course, a tough period that included the COVID pandemic, followed by inflation and a labor shortage. Still, on average, those companies beat the revenue growth of their peers by an impressive five percentage points and beat annual profitability by seven percentage points. The result: a five-point edge in total shareholder returns.
The researchers found three characteristics common to the winners:
