The logo of Flipkart Online Services Pvt is seen on the side of a package at the company’s office in Bengaluru, India. (Photographer: Dhiraj Singh/Bloomberg)

Flipkart Deal To Hit Walmart Earnings

The world's largest big-box retailer Walmart Inc. today said its $16-billion investment in Indian e-tailer Flipkart will hit its operating income as well as earnings per share.

The Bentonville, U.S.-based company said its earnings per share is now expected to be around $2.65-2.80 as compared to a previous guidance of $2.90-3.05 for the fiscal ending Jan. 31, 2019.

Financial year 2020’s operating income is expected to decline by a low single digit percentage range, but is expected to increase by a low single digit percentage range when excluding Flipkart in both financial year 2019 and financial year 2020.
Walmart In A Regulatory Filing.

Walmart, in May, picked up a 77 percent stake in Flipkart for $16 billion as part of its efforts to ramp up its e-commerce business as it takes on global rival Amazon.com Inc.

The deal with Flipkart, which was completed in August, will not only help Walmart strengthen its play in the Indian market but also cash in on the burgeoning online retail market in India that is poised to touch $200 billion in the next few years.

Also read: Online Retailers Mint Rs 15,000 Crore In Five Days Of Festive Sale

The retail giant’s investment in Flipkart also includes $2 billion of new equity funding to help accelerate the Bengaluru-based company’s business that is locked in intense competition against Amazon’s India unit.

For the financial year 2020, Walmart said it expects its U.S. same-store sales growth to be in the range of 2.5-3 percent. Its net sales growth is forecast to be at least 3 percent in constant currency, “negatively impacted” by de-consolidation of its Brazil business and lower tobacco sales at Sam’s Club.

Also read: Walmart Sees U.S. Sales Expansion Chugging Along Next Year