Flipkart affects Walmart’s international profit for second quarter in a row

By

Isabelle Crossley

Published
Aug 16, 2019

E-commerce platform Flipkart’s financial performance has impacted its parent company Walmart’s international results for the second quarter in a row as its operating profits fell by 30% during the previous quarter.

Walmart’s international arm saw its operating profits fall by 30% at $900 million (Rs 5987.5 crore) during the most recent quarter of its financial year, due mostly to Flipkart’s performance, TNN reported. This was the second quarter in a row that Flipkart has affected the US business’ international performance as its profits had also fallen by 38% in the quarter before that. 

Net sales were also down by 1.1% for Walmart’s international arm to $29.1 billion. The business’ US arm reported strong numbers but its India arm has affected the overall performance. This year will be the first financial year that Walmart’s financials will include Flipkart after the business acquired a 77% stake last summer for $16 billion. Walmart had already predicted that the acquisition would lead to losses in the short term. 

Although Flipkart is still affecting Walmart’s overall performance, the business remains positive. “I’m excited about the opportunity we have in India, and I’m pleased with the progress we’re making in China,” said Walmart’s CEO Doug McMillon in a statement on the financial results. “For the quarter, nine of 10 markets posted positive comp sales [comparable-store sales]…Although we face macroeconomic and political challenges in some of our markets, our teams continue to find innovative ways to serve customers and deliver solutions that make shopping easier.”