It was somewhat of a muted third quarter for retail giant Walmart’s India operations as the late arrival of the festive season put a dampener on festivities.
Walmart, which released Q3 financial results on Thursday (November 16) said that it saw strong growth in ecommerce sales and increased penetration across international markets, with the sole exception of India.
In a statement, the company said that the timing of subsidiary Flipkart’s The Big Billion Days (BBD) sale slipped to Q4 this year, which impacted Q3 growth and sales. Walmart, however, expressed optimism that the surge of festive season sales will be reflected in the ongoing fourth quarter.
The timing of the BBD sale also pummeled Walmart International’s top line as ecommerce sales declined 3% YoY while the advertising business grew by a mere 4% annually. The company explicitly attributed the subdued numbers to the delay in the sale.
Walmart also noted that it expects the growth in ecommerce sales and advertising business during the second half of 2023 to be on par with H1 numbers.
The late arrival of The Big Billion Days sale, which is headlined by heavy offers and steep discounts, also helped the company’s international arm grow its gross margin rate by 151 bps. Alongside, operating expenses deleveraged by 75 bps primarily on the back of the timing of BBD.
“Ecommerce sales declined 3% while advertising grew 4% — both affected by the timing of BBD… Other than India, strong growth in ecommerce sales and increased penetration across markets… Growth in ecommerce sales and advertising for H2 is expected to be similar to H1,” the company said.
While the hefty festive season sale numbers are expected to kick in Q4, Walmart has long touted Flipkart as its crown jewel in the Indian ecommerce space. In August, Walmart’s chief financial officer John David Rainey said that the ecommerce platform had recorded strong gross merchandise value (GMV) and sales growth during Q2 while shoring up profitability.
While India operations weighed heavily on international operations, the US-based giant recorded better-than-expected overall financial results in Q3, reporting a profit of $453 Mn $160 Bn in revenues.
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