India helps Walmart’s international sales grow in FY20; overall revenue increases by $9.6 billion

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Published: February 19, 2020 1:41:25 PM

Walmart International, which has operations in 10 countries, saw e-commerce contributing 12 per cent of its total sales led by Flipkart and online grocery sales in other markets.

Walmart Vriddhi Supplier Development Program to provide training to 50,000 small businesses.

Retail behemoth Walmart, which defines its fiscal year from February 1 to January 31, reported a 2.8 per cent increase in its net sales to $125.6 billion in FY20 from $122.8 billion in FY19 in constant currency “with strength in India, Mexico, and China,” it said. The company’s Q4 FY20 growth in net sales increased 2.3 per cent to $33.4 billion from Q3 FY20 in constant currency, according to the company’s quarterly earnings release on Tuesday. Constant currencies are basically exchange rates that companies use to avoid the impact of currency fluctuations in arriving at the growth figures in financial statements.

“In Q4, we saw strong performance in the U.S. with e-commerce and Sam’s Club plus strength in Mexico, India and China,” said Doug McMillon President and CEO, Walmart in the statement. Walmart International, which has operations in 10 countries, saw e-commerce contributing 12 per cent of its total sales led by Flipkart and online grocery sales in other markets. For FY19, Flipkart Private Limited — the group company saw a 42 per cent increase in total revenue to $6.14 billion from $4.32 billion in FY18.

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Walmart’s consolidated revenue stood at $524 billion FY20, up by $9.6 billion or 1.9 per cent from $514 billion in FY19. Among the key developments by Walmart in FY20 in India was launching PhonePe as a payment option at its B2B Cash & Carry stores and set-up the Walmart Vriddhi Supplier Development Program to provide training to 50,000 small businesses.

The return on assets (ROA) for Walmart for FY20 increased to 6.7 per cent from 3.4 per cent in FY19. This was primarily because of consolidated net income growth primarily due to the “change in fair value of the investment in JD.com (China’s e-commerce company) and lapping the $4.5 billion net loss in FY19,” related to its majority stake sale in Brazil business. This was partially offset by the dilution to operating income related to Flipkart as well as business restructuring charges recorded in FY 2020, Walmart said.

The consolidated net income grew 123.1 per cent from $6.6 billion in FY19 to $14.8 billion in FY20. In terms of ROI, which went down to 13.4 per cent from 14.2 per cent during the said period was due to the decrease in operating income. This decrease, said Walmart, was “primarily as a result of the dilution from Flipkart as well as business restructuring charges recorded in FY 2020.” The operating income declined 6.3 per cent from $21.9 billion in FY19 to $20.5 billion in FY20.

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