Walmart’s India operations experienced a subdued third quarter, with festivities dampened by the delayed onset of the festive season.
In its Q3 financial results unveiled on Thursday, Walmart reported robust growth in e-commerce sales and expanded market presence globally, except for India, where penetration did not witness the same upward trend.
The company stated that the timing of subsidiary Flipkart’s The Big Billion Days (BBD) sale shifted to Q4 this year, affecting Q3 growth and sales. Despite this, Walmart conveyed optimism that the upswing in festive season sales would be evident in the current fourth quarter.
The BBD sale’s timing had a negative impact on Walmart International’s revenue, with a 3% year-over-year decline in e-commerce sales and only a modest 4% annual growth in the advertising business. The company explicitly linked these subdued figures to the delayed sale.
Walmart additionally indicated its anticipation that the growth in e-commerce sales and advertising business for the second half of 2023 will align with the figures observed in the first half of the year.
The delayed commencement of The Big Billion Days sale, renowned for substantial offers and deep discounts, contributed to the international arm of the company achieving a 151 basis points increase in its gross margin rate. Simultaneously, operating expenses experienced a 75 basis points deleverage, primarily attributable to the timing of The Big Billion Days.
“Ecommerce sales declined 3% while advertising grew 4% — both affected by the timing of BBD… Other than India, strong growth in ecommerce sales and increased penetration across markets… Growth in ecommerce sales and advertising for H2 is expected to be similar to H1,” the company said.
Anticipating a substantial boost in sales during the robust festive season in Q4, Walmart has consistently hailed Flipkart as its flagship asset in the Indian e-commerce landscape. In August, Walmart’s Chief Financial Officer, John David Rainey, highlighted Flipkart’s impressive performance in terms of gross merchandise value (GMV) and sales growth during Q2, coupled with strengthened profitability.
Despite the challenges posed by its operations in India affecting the international segment, the U.S.-based giant surpassed expectations with its Q3 financial performance. It reported a profit of $453 million on revenues totaling $160 billion.
