Walmart’s global advertising business grew nearly 30 percent in the June quarter (Q2), led by Flipkart advertising and US ad sales, the retail major said on August 16.
Meanwhile, PhonePe continued to show strong growth with annualised TPV (total payments volume) of over $830 billion in the June quarter, and reaching a record monthly volume of transactions of 3.1 billion, according to the US-based retail major.
Walmart owns both Flipkart and PhonePe.
The company saw its Q2 revenue rise 8.4 percent to $153 billion and said that the growth was partially driven by inflation. Walmart saw its international sales rise 5.7 percent to $24.4 billion.
"Flipkart continues to meet our expectations and the team is gearing up for big billion days. I travelled to India last month and was impressed by how Flipkart and PhonePe teams are innovating for the customer and driving growth," said Walmart chief financial officer John David Rainey in an earnings call.
It registered strong sales growth in Mexico, Canada and China, each also growing faster than inflation. The company said it saw strength in food and consumables across all markets and softness in general merchandise in some markets. E-commerce net sales contributed 19 percent of total net sales in the international markets.
Walmart expects a consolidated net sales growth of about 5 percent in the September quarter (Q3), negatively affected by approximately $1.3 billion from currency fluctuations. It gave a guidance of consolidated operating income decline of 8.0 percent to 10.0 percent in Q3.
The company on August 16 forecast a smaller drop in annual profit than it had predicted less than a month ago, after deep discounts to clear excess merchandise, and a drop in fuel prices helped it beat expectations for quarterly sales.
The retailer spooked markets across the globe last month when it slashed its profit forecast and warned that consumers were pulling back on discretionary purchases at a far greater pace than feared as higher prices for everything from toothpaste to gas hampered their spending power.
That forced Walmart to make steep price cuts on items such as apparel to try to reduce more than $61 billion worth of inventory it was sitting on at the end of the first quarter.
Walmart reported inventories of $59.92 billion at the end of the second quarter ended July 31 that was still 25 percent above last year's levels.
"The actions we've taken to improve inventory levels in the US along with a heavier mix of sales in grocery put pressure on profit margin for Q2 and our outlook for the year," Walmart Chief Executive Officer Doug McMillon said.The blue-chip stock, which has fallen over 8 percent this year, rose 4 percent in premarket trading.