Flipkart's Double-digit Growth Helps Walmart Sales Jump 13% At $26.8 Bn

Walmart’s international net sales were up 12.9 per cent year-on-year (YoY) at $26.8 billion in constant currency (CC), led by Flipkart, China, and Walmex (Walmart de México y Centroamérica), said the company in the first quarter (Q1) of 2023-24 (FY24) results. The company said there was strong sales growth, led by double-digit growth in Flipkart, China, and Walmex.

Walmart’s financial year runs from February 1 to January 31 of the following year.

The US retail giant is the owner of the e-commerce company Flipkart and financial technology firm PhonePe. Walmart said that PhonePe, which was recently hived off from Flipkart, crossed an annualised payments volume of $1 trillion, according to Walmart filings.

“Walmart International had a great quarter, continuing our momentum from last year. Sales grew 12.9 per cent in CC and profit grew even faster at 41 per cent. China, Walmex, and Flipkart saw double-digit top line growth. In China, the reopening of the economy coincided with the Chinese New Year season, and that drove traffic to our clubs and stores. Sam’s Club China continues its strong performance,” said Doug McMillon, president and chief executive officer (CEO), Walmart Inc, in a conference call.

“For India, a group of us were there last week, and we (are) even more excited about our opportunities. Flipkart and PhonePe are doing well. Our Walmart tech team there is strong. And we have a big opportunity to increase our exports from India across quite a few merchandise categories,” he added.

McMillon, along with other top Walmart leaders, including Judith McKenna, president and CEO, Walmart International, were recently on a visit to India. McMillon reinforced the firm’s continued commitment to India and to meet the company’s goal of sourcing $10 billion of India-made goods each year by 2027. This includes building an ecosystem of suppliers and partners and small and medium enterprises.

In Walmart’s Q1FY24 earnings results, Walmart International reported growth in e-commerce sales of 25 per cent, with strength in store-fulfilled and advertising (ad). Gross margin expanded 12 basis points (bps) over last year. Operating expense leverage of 111 bps on strong growth in net sales and operating discipline. There was operating income of $1.1 billion, a growth (in CC) of 41.5 per cent with strength across markets.

John David Rainey, executive vice-president and chief financial officer, Walmart Inc, said that the international ad business continued to show strength, led by Flipkart’s ad business, which was up over 50 per cent.

In India, he said Flipkart had strong top line results and continued to increase its contribution profit. He said the team continues to expand the products and services. Illustrating an example, he said Flipkart launched bus transportation services on the platform through Cleartrip and is capable of offering 1 million bus connections to customers.

Walmart reported consolidated revenue of $152.3 billion for Q1FY24, up 7.7 per cent in CC. Consolidated operating income was up by $0.9 billion, or 17.3 per cent YoY. E-commerce grew 26 per cent globally for Walmart during the quarter, on the back of pick-up and delivery.

“We had a strong quarter. Comparable sales were strong globally, with e-commerce up 26 per cent. We leveraged expenses, expanded operating margin, and grew profit ahead of sales,” said McMillon.

India is likely to surpass China and emerge as the largest international market for Walmart this year, said Rainey recently.

The retail industry in the country is likely to see 10 per cent annual growth to reach about $2 trillion by 2032, according to a Boston Consulting Group-Retailers Association of India report. The sector is on the ‘cusp’ of having innovations in both physical and e-commerce through the use of new cutting-edge technologies, according to experts.

In India, Walmart-owned Flipkart competes with players such as Amazon, Meesho, Reliance’s JioMart and Tata Group.