“For instance, the Flipkart
business was limited by government regulation to selling only essential items for several weeks, and in South Africa a large number of stores were closed,” he said. Sales were positive in nine of 10 markets, including the major markets of Mexico, China, Canada and the UK. They were partially offset by the closure of stores or e-commerce operations in markets including India, South Africa and Central America.
“But broadly speaking, in each market our teams are stepping up to serve customers and help their communities,” said McMillon. In the first quarter of FY21, net sales of Walmart
International, increased 3.4 per cent on a reported basis to $29.8 billion compared to $28.8 billion in Q1FY20. It increased 7.8 per cent in constant currency to $31.0 billion.
In the first quarter, Walmart
International’s gross profit rate increased 10 basis points on a reported basis primarily because of the company’s Flipkart
This was partially offset by an outsized change in mix towards lower margin categories and formats in response to Covid-19. Walmart acquired Flipkart in 2018 for $16 billion.
The company said its overall net sales and operating results were significantly affected by the outbreak of Covid-19. Walmart’s total revenue was $134.6 billion, an increase of $10.7 billion, or 8.6 per cent for Q1FY21. Excluding currency, total revenue would have increased 9.7 per cent to reach $135.9 billion.
Thanks to the continued strength of the Walmart.com brand, the company said it will discontinue Jet.com. The acquisition of American e-commerce firm Jet.com nearly four years ago was critical to accelerating its omni strategy.
The operating income of Walmart International increased 9.2 per cent on a reported basis and 15.6 per cent in constant currency. The effects of changes in currency rates negatively affected operating income by approximately $47 million. Growth for Walmex and Canada, along with the effects of the company’s Flipkart business in India, were partially offset by a decline for supermarket retailer Asda in the UK. and China.
Return on investment for Walmart was 13.4 per cent and 14.5 per cent for the trailing twelve months ended April 30, 2020 and 2019, respectively. The decrease was primarily due to the decrease in operating income because of the dilution from Flipkart and business restructuring charges recorded in fiscal 2020, as well as the increase in average total assets due to the Flipkart’s acquisition.