Walmart attributed the growth in its net sales to Flipkart’s flagship festive season sale in India, the Big Billion Days, moving forward to Q3 this year from Q4 last year
Walmart said it was extremely pleased with Flipkart’s performance during the quarter, and added that the Indian ecommerce arm continues to meet its expectations
The US retail giant reported a net loss of almost $1.8 Bn during its Q3 as against a profit of $3.1 Bn in the year-ago quarter, hurt by rising operating expenses
US retail giant Walmart International’s net sales grew 7.1% year-on-year (YoY) to $25.3 Bn during Q3 ending October 31. The contribution of ecommerce sales, which stood at $5.9 Bn, to total sales rose 400 basis points (bps) YoY to 23% during the quarter, primarily helped by Flipkart.
Flipkart’s flagship festive season sale in India, the Big Billion Days, moving forward to Q3 this year from Q4 last year contributed to the growth, Walmart said in a statement.
“In India, Flipkart had a great quarter with strong customer response to our Big Billion Days event which moved forward into Q3 this year from Q4 last year. We had over 1 Bn visits to our site during the eight-day event and importantly saw more than 60% of those customers coming from Tier 2 and Tier 3 cities,” Walmart CFO John David Rainey said during an investor call.
Walmart also said that it is extremely pleased with Flipkart’s performance during the quarter, and added that the Indian ecommerce arm continues to meet its expectations.
However, the Flipkart owner reported a consolidated net loss of almost $1.8 Bn during its Q3 as against a profit of $3.1 Bn in the corresponding quarter last year, hurt by a rise in its operating expenses, which increased 144 bps as a percentage of net sales, due to $3.3 Bn spent on legal settlements related to mishandling of opioid drugs in the US.
Meanwhile, Walmart said that it expects its Q4 net sales growth to be at about 3%, and YoY operating income within a range of a 1% increase to a 1% decrease.
“Despite a good start to Q4, our guidance assumes the consumer could slow spending, especially in general merchandise categories, given persistent inflationary pressures in food and consumables,” the company said.
Flipkart’s Recent Performance
It is pertinent to note that Flipkart’s losses have been growing, which has also hurt Walmart’s balance sheet earlier.
As per Walmart’s report during the quarter ending July 31, Flipkart burnt $1.1 Bn in cash between February and July 2022, with its cash and cash equivalents standing at $3.5 Bn at the end of July this year.
Flipkart Internet, the ecommerce giant’s marketplace arm, saw its standalone net loss grow 1.5X to INR 4,361 Cr in FY22 from INR 2,881.3 Cr in FY21, while its total income rose 31% to INR 10,659 Cr.
On the other hand, its B2B arm Flipkart India reported a higher loss of INR 3,404.4 Cr in FY22 as against INR 2,444.8 Cr in the previous fiscal year.
At the end of March 2022, Flipkart India’s cash and cash equivalents stood at INR 3.9 Cr as against INR 76.7 Cr at the end of March 2021.
Walmart’s free cash flow for the nine months ended October 31, 2022 stood at $3.6 Bn, a decline of $4.1 Bn compared to the same period last year.