Excited about opportunity with Flipkart and PhonePe: Walmart CEO
The effect of the $16 billion acquisition of Flipkart still remains on Walmart’s financials, as the Indian startup contributes to the company's international sales.Thimmaya Poojary
Global retailer Walmart continues to remain excited about the market opportunity from its India ecommerce subsidiary Flipkart positively contributing to its overall international sales, though it continues to remain a drag on its operating income.
Walmart announced its first quarter results 2019-20 for the three month period ending April 30, 2019, where the retailer’s President & CEO Doug McMillon said,
“I got to visit our teams in India and China a few weeks ago. I continue to be excited about the opportunity I see with Flipkart and PhonePe. I’m impressed with the team and their ability to innovate for customers with speed.”
The Walmart CEO and other key officials visited India offices of Flipkart recently and were very positive about the future prospects. In fact, it has been year now since the US company took a majority stake in Flipkart in a deal valued at $16 billion.
Walmart reported a total revenue of $123.9 billion for this period, which was an increase of $1.2 billion or 1.0 percent. Excluding the impact of currency, the total revenue was $125.8 billion, an increase of $3.1 billion, or 2.5 percent.
The net sales at Walmart International were $28.8 billion, a decline of 4.9 percent but excluding currency impact, net sales were $30.6 billion, an increase of 1.2 percent. The retailer said that the deconsolidation of its operations in Brazil was a headwind in the quarter but was partially offset by sales from Flipkart.
Walmart said the comparable sales in seven of its international markets, which also includes India, were positive.
On the operating income from its international operations, the company said it was down 38 percent on constant currency basis and 42 percent on reported basis primarily due to Flipkart.
CFO Brett Biggs said, “A large part of the decline was due to dilution from Flipkart, which was expected, partially offset by the deconsolidation of Brazil. The timing of Easter also negatively affected operating income versus last year. The full year earnings dilution related to Flipkart is still in line with expectations.”
Walmart, which is putting up a strong competition against its key rival Amazon, said that its ecommerce sales in the US grew by 37 percent during the quarter, driven by strong growth in online grocery and its home and fashion categories on Walmart.com.