Walmart, the parent company of Flipkart, announced its third quarterly results with a consolidated revenue of $169.6 billion. The company has mentioned that the Big Billion Sales of Flipkart benefitted its Q3 growth.
Speaking about profitability in the e-commerce segment, Walmart’s Chief Executive Officer C. Douglas McMillon said in the company's earnings call that one should not race it. He added that this is a long-term game. “The 1P, 3P mix is one dimension to manage, for example. And if we should carry more first-party items and that somehow delays crossing a threshold of profitability, we're good with that because that's what customers want,” added McMillon. In the third quarter, Walmart’s gross profit margin increased by 21 basis points to 24.2 percent.
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His statement further highlighted the fact that speed is of utmost priority for Walmart at this moment. He highlighted, “If investments in delivery speed cause us to reach profitability a little later, that's fine, too. We want to deliver faster,” he added.
To add to it, the company also highlighted that e-commerce sales rose by 43 percent. This was driven by marketplace transactions and store-fulfilled pickup & delivery; penetration increased across various markets. Further, the company’s advertising business grew by 50 percent, with Flipkart leading the charge.
Speaking about the company’s performance, John David Rainey, Executive Vice President and Chief Financial Officer, Walmart, said in a statement, “We had a strong quarter, continuing our momentum. Our associates are working hard to save people time and money and to transform our business. In the U.S., in-store volumes grew, pickup from the store grew faster, and delivery from the store grew even faster than that. Our teams are executing and delighting our customers and members with the value and convenience they expect from Walmart.”
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The company also highlighted in its statement that its sales growth was driven primarily by Flipkart, Walmex, and China. “From a margin standpoint, consolidated gross margin expanded 21 basis points, led by Walmart U.S., with international results pressured by the timing of Flipkart's BBD sales event,” said Rainey.
The company's net sales increased to $30.3 billion this quarter. This was an 8 percent year-on-year (YoY) growth. Further, with regards to the Walmart-owned PhonePe, it also had a strong performance. The company’s monthly transactions surpassed 8.7 billion. Further, the total annualized payment volume of the fintech company was approximately $1.6 trillion.
Additionally, speaking about the concept of same-day delivery, the company highlighted that they saw a surge in it during the Big Billion Sales. “And during Flipkart's Big Billion Day's event, we experienced same-day delivery growth, two and a half times higher than last year,” added Rainey in an earnings call. He also noted that Flipkart launched its quick commerce delivery arm, Flipkart Minutes, recently in a few places in Bangalore. The platform has been launched for a variety of items, including groceries and electronics.
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