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Walmart international net sales hit due to Flipkart’s limited operations during COVID-19 lockdown

“Net sales included the effects of the government-mandated closure of the company’s Flipkart business in India for a portion of the quarter, as well as similar actions in markets in Africa and Central America,” Walmart said.“Net sales included the effects of the government-mandated closure of the company’s Flipkart business in India for a portion of the quarter, as well as similar actions in markets in Africa and Central America,” Walmart said.“Net sales included the effects of the government-mandated closure of the company’s Flipkart business in India for a portion of the quarter, as well as similar actions in markets in Africa and Central America,” Walmart said.“Net sales included the effects of the government-mandated closure of the company’s Flipkart business in India for a portion of the quarter, as well as similar actions in markets in Africa and Central America,” Walmart said.

Walmart on Tuesday said the company’s international net sales were impacted during the May-July period due to Indian subsidiary Flipkart’s limited operations for a portion of the quarter amid the pandemic-induced restrictions. Similar actions in markets like Africa and Central America also affected the segment’s sales. The US-based retailer’s financial calendar runs from February-January.

Walmart’s international net sales stood at $27.2 billion in Q2FY21, a decrease of 6.8% year-on-year. Changes in currency rates negatively affected net sales by approximately $2.4 billion. Excluding currency, net sales would have been $29.6 billion, a marginal increase by 1.6% on year, the company said in a statement.

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“Net sales included the effects of the government-mandated closure of the company’s Flipkart business in India for a portion of the quarter, as well as similar actions in markets in Africa and Central America,” Walmart said.

“In India, Flipkart reopened in mid-May, after which we saw GMV exceeding pre COVID-19 levels,” said president and CEO Doug McMillon at the earnings call.

India had imposed a nationwide lockdown starting March 25 which restricted operations of e-commerce companies to delivery of essential items only. Permission to resume delivery of non-essential items was issued only in phases with full operations (barring containment zones) being reinstated only in late May.

Online firms are still not allowed to deliver non-essentials in the containment zones, said an executive with an e-commerce company. Many states continue to enforce localised lockdowns as surge in coronavirus cases continue. Smartphones and electronic items typically form the bulk of orders serviced by e-commerce companies.
Of late, online sales in the country have seen a significant rise as consumers took to online shopping and restricted movements.

Flipkart recently said the company’s five-day Independence Day sale witnessed a 54% increase in the number of transacting sellers led by tier two cities and beyond compared to the year-ago period. Flipkart added sellers from smaller towns and cities during the sale, thereby expanding its footprint to places like Dharuhera, Datia, Dholpur, Purnia and Motihari, the company said in a statement. Consumer demand was led by categories like grooming, household items, personal health care, mobile protection and select womenwear, among others.

Walmart’s total revenue for the quarter stood at $137.7 billion, an increase of 5.6% on year.

Consolidated operating expenses as a percentage of net sales increased 42 basis points, primarily as a result of incremental expenses related to Covid-19. In total, these costs negatively affected expense leverage by about 130 bps. Underlying productivity in stores and eCommerce remained strong, Walmart said.

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