Flipkart’s double-digit sales growth in the September quarter (Q3) was the primary factor in pushing up Walmart International’s net e-commerce sales by 400 basis points to around $6 billion in the period, the US retail major said on November 15.
Walmart said that the timing of Flipkart’s Big Billion Days sale event during the quarter helped its international arm reduce inventory growth in the September quarter (Q3) to $12 billion. But, the sale event contributed to a drop in its gross profit rate by 112 basis points during the quarter.
"In India, Flipkart had a great quarter with strong customer response to Big Billion Days sales. We had over 1 billion visits to the site during the 8-day event. More importantly, we saw more than 60 percent of those customers come from tier 2 and tier 3 cities," Walmart chief financial officer John David Rainey said in a post-earnings call with analysts.
According to a PTI report last week, Flipkart has burnt cash of $3.7 billion (about Rs 30,000 crore) in about a year ending September 2022, according to regulatory filings.
Flipkart had $1 billion in cash in July 2021, which came down to $887 million by September 2022. The company, in July 2021, raised $3.6 billion (about Rs 29,000 crore), which has been completely exhausted, according to regulatory filings of Flipkart and Walmart.
Walmart International recorded net sales of $278 billion in Q3 in constant currency terms, up 13 percent compared to the year-ago period.
At a group level, Walmart’s revenue rose 8.7 percent to $152.8 billion in the September quarter while operating income plunged 53.5 percent to $2.7 billion. Meanwhile, the global advertising business grew over 30 percent, led by a 40 percent growth at Walmart Connect in the US and strength in Flipkart Ads.
The US retail major has raised its outlook for the entire year with net sales growth of about 5.5 percent. Based on current exchange rates, the company expects a headwind of about $4.1 billion for the year.
Increasing losses in India
Moneycontrol reported earlier that Flipkart India Private Limited, the wholesale business arm of the e-commerce major, saw its revenue rise 18 percent to Rs 51,176 crore in FY22, while net loss widened 39 percent to Rs 3,404 crore, according to the company’s MCA filings shared by Tofler.
The Walmart-owned company’s total expenses for the fiscal were reported as Rs 54,580 crore.
Meanwhile, Flipkart Internet Private Limited, a key arm of the e-commerce company that provides services like payment gateway, technology, advertising and logistics management, saw its revenue rise 31 percent to Rs 10,659 crore while net loss widened 51 percent to Rs 4,362 crore.
The company’s MCA filings, accessed by financial intelligence platform Tofler, showed that its EBITDA loss ballooned from Rs 2,227 crore in FY21 to Rs 3,925 crore in FY22.
The filings showed that Flipkart Internet booked revenues of Rs 3,848 crore from logistics management services, Rs 2,084 crore from advertising services, Rs 2,824 crore from computer development services, and Rs 1,178 crore from the payment gateway and allied services in FY22.
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