Flipkart advertising and US ad sales helped Walmart’s worldwide advertising division grow by nearly 30% in the second quarter of June, the retail giant reported on August 16.
According to the US-based retail giant, PhonePe continued to see rapid development, achieving a record monthly number of transactions of 3.1 billion and an annualised TPV (total payments volume) of over $830 billion in the June quarter.
Flipkart and PhonePe are both owned by Walmart.
The business reported an 8.4% increase in Q2 revenue to $153 billion, with inflation playing a role in the expansion. Walmart’s global sales increased by 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.
China, Canada, and Mexico all saw significant sales increase that was faster than the rate of inflation. The company reported that it observed growth in all areas for food and consumables and softness in some markets for general merchandise. 19% of the total net sales in the international markets came from e-commerce.
Walmart anticipates a consolidated net sales rise of roughly 5% in the third quarter (Q3), which will be adversely impacted by currency fluctuations to the sum of $1.3 billion. It provided expectations for a fall in consolidated operating income of 8.0 percent to 10.0 percent in the third quarter.
As a result of steep discounts to get rid of surplus inventory and a decline in fuel prices, the company outperformed forecasts for quarterly sales on August 16 and estimated a lesser decline in yearly profit than it had anticipated less than a month before.
When the retailer cut its profit prediction last month, it alarmed markets around the world and indicated that consumers were cutting back on discretionary purchases at a much faster rate than anticipated as increasing prices for everything from toothpaste to gas limited their purchasing power.
In an effort to eliminate the more than $61 billion in excess inventory it had at the end of the first quarter, this compelled Walmart to implement significant price reductions on products like clothing.
At the end of the second quarter, which ended on July 31, Walmart reported having $59.92 billion in inventories, which was still 25% more than the same period the previous year.
“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 lost more than 8% of its value this year, increased by 4% in premarket trade.