US retail giant Walmart on Thursday posted a stronger gross margins in its international business and also on a consolidated basis in Q3, mainly because its Indian arm Flipkart’s Big Billion Day sale was pushed to Q4 unlike the previous year.
Flipkart’s annual festive sale was held this year between October 8-15, while last year it was held between September 23-30. This helped Walmart post a 151 bps rise in gross margins for its global business in Q3.
However, the delay in Big Billion Day sale slowed down the sales growth in Walmart’s international segment. On a constant currency basis, net sales rose 5.4% year-on-year to $26.7 billion in Q3, primarily led by Walmex, Walmart’s Mexican and Central American division, and Walmart China.
In its international business, e-commerce sales declined 3% in Q3 and advertising sales rose only 4%, both affected by the timing of Flipkart’s festive sale, the company said. However, the sale is expected to benefit the current quarter results. “Other than India, strong growth in e-commerce sales and increased penetration across markets,” it said.
Overall, Walmart’s international segment posted an operating income of $1 billion in Q3, up 10.7% year-on-year.
Besides the slight hit to international business, on a consolidated basis, Walmart posted a strong rise in net sales and upped its annual guidance for revenue and profit, marking a positive start to the crucial holiday season.
The company increased its FY24 earnings per share guidance between $6.40 and $6.48, from its prior forecast of $6.36 to $6.46. It now expects revenue to be between 5% to 5.5%, compared to an increase of 4% to 4.5% previously.
For Q3, it reported a net sales growth of 5.2% year on-year to $160.8 billion while adjusted earnings per share came at $1.53. “Sales strength led by grocery and health & wellness, while general merchandise sales declined modestly,” the company said in its earnings statement.