In Q3 FY23, the company’s consolidated operating income was $2.7 billion, a decrease of 53.5 per cent, compared to Q3 FY22, while the adjusted operating income was $6 billion, an increase of 3.9 per cent. Furthermore, the consolidated gross profit rate declined 89 basis points, compared to Q3 FY22, primarily due to markdowns and mix of sales in the US and the timing of Flipkart’s annual event, the Big Billion Days.

Consolidated operating expenses as a percentage of net sales increased 144 basis points in Q3 FY23, compared to corresponding period of previous fiscal, due to charges of $3.3 billion related to opioid legal settlements. Adjusted operating expenses as a percentage of net sales decreased 75 basis points in Q3 FY23, compared to Q3 FY22, primarily due to strong sales growth and lower COVID-related costs.

Walmart’s adjusted EPS for Q3 FY23 was $1.50, while the adjusted EPS was $4.57 for the first three quarters of FY23.

The company’s net cash provided by operating activities was $15.7 billion for the nine months ended October 31, 2022, which represents a decline of $0.6 billion when compared to the same period in the prior year. The decline is primarily due to the timing of certain payments and a decrease in operating income, partially offset by moderated inventory purchases. Free cash flow for the first three quarters of FY23 was $3.6 billion, which represents a decline of $4.1 billion when compared to the same period in the prior year. The decline in free cash flow is due to the reduction in operating cash flows, as well as an increase of $3.5 billion in capital expenditures to support investment strategy.

In Q3 FY23, Walmart US’ comp sales grew 8.2 per cent, compared to Q3 FY22, and the comp sales grew 17.4 per cent on a two-year stack. E-commerce growth was 16 per cent, compared to Q3 FY22, and e-commerce grew 24 per cent on a two-year stack.

In Q3 FY23, Walmart International net sales were $25.3 billion, an increase of $1.7 billion, or 7.1 per cent, compared to Q3 FY22, negatively affected by $1.5 billion from currency fluctuations.

The company’s guidance for Q4 and fiscal 2023 is provided on a non-GAAP basis. Growth rates reflect an adjusted basis for prior year results. Fiscal 2023 operating income is adjusted for charges related to opioid legal settlements in the third quarter. The company’s guidance assumes a generally stable consumer in the US, continued pressure from inflation and mix of products and formats globally. 

For the fourth quarter of FY23, the company expects the consolidated net sales to grow about 3 per cent, negatively affected by approximately $1.3 billion from currency fluctuations.

For fiscal 2023, Walmart’s net sales growth is expected to be about 5 per cent. Based on current exchange rates, the company expects a headwind of about $4.1 billion for the year. Walmart US’ comp sales growth, excluding fuel, are expected to be about 5.5 per cent. The company’s consolidated adjusted operating income is expected to decline around 6.5 per cent to 7.5 per cent, which improved from the company’s prior guidance of a decline of 9 per cent to 11 per cent and reflects better performance in the third quarter. Walmart’s adjusted earnings per share is expected to decline around 6 per cent to 7 per cent.

Fibre2Fashion News Desk (DP)