Sales from Flipkart boosts revenue for Walmart International
Walmart International’s net sales for the quarter ending October 2019 shows an increase in net sales from the ecommerce channel.
US retail giant Walmart reported its first quarterly earnings recently that includes the financial numbers of India’s home-grown ecommerce major Flipkart. The company began consolidating the financial statements of Flipkart in the third quarter of fiscal 2019, using a one-month lag.
In a recent filing with the US Securities and Exchange Commission (SEC), Walmart said that Flipkart’s net sales have partially offset the fall in its international segment’s revenue in half of the third quarter. It reports its revenue under three segments – Walmart US, Walmart International, and Sam’s Club.
The company said, “Net sales for the Walmart International segment decreased $0.8 billion or 2.6 percent for the three months ended October 31, 2018, when compared to the same period in the previous fiscal year. This decrease was primarily due to a $1.3 billion reduction in net sales due to our sale of a majority stake in Walmart Brazil and $1.2 billion of negative fluctuations in currency exchange rates. The decrease was partially offset by positive comparable sales growth in the majority of our markets and the addition of Flipkart’s net sales for approximately half of the third quarter”.
In an article in June this year, YourStory had reported on world’s largest retailer as it tries to play catch up with rival Amazon in the online space, the Flipkart acquisition could bolster its international online presence.
The filings of the last three quarters’ financial statements also reveal that Walmart International segment generated slightly more revenue from ecommerce channels in the October ending quarter of FY19 than in the previous two quarters.
Walmart’s International segment generated a revenue of $28.7 billion. Out of that approximately $1.5 billion relates to ecommerce for the three months ending October 31, 2018. Its net sales related to ecommerce in previous two-quarters of FY19 (April and July ending quarters) were $1 billion each, respectively.
Walmart’s filing also revealed that when it bought 77 percent stake in Flipkart, the purchase consideration included liabilities of $3.8 billion, which comprises of $1.9 billion of current liabilities and $1.9 billion of deferred income taxes. Its total assets were valued at $24.7 billion that comprised primarily of $2.9 billion in cash and cash equivalents, $2.3 billion in other current assets, $5.4 billion in intangible assets and $13.7 billion in goodwill.