Walmart’s June-quarter profit margins dipped, hit by investments in ultra-fast delivery networks
India remains a key growth driver, with Flipkart and Myntra posting strong sales gains
The retailer has built 300 fulfilment centres for Flipkart and 60 for Myntra to power 15–30 minute deliveries
Walmart International's Margins Dip as Flipkart, Myntra Bet Big on 15-Minute Deliveries
Walmart’s international business margins came under pressure in the June quarter as it doubled down on building a quick commerce footprint in India. The retail giant said operating income fell nearly 10% to $1.2 billion, with higher costs tied to 15- and 30-minute fulfilment networks
Walmart International's Margins Dip as Flipkart, Myntra Bet Big on 15-Minute Deliveries
Summary
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Walmart’s aggressive bet on India’s fast-growing quick commerce sector is starting to weigh on its number. The US retailer giant, which owns Flipkart, Myntra and PhonePe, reported a dip in its international gross profit rate for the June quarter. The company cited costs tied to 15-minute and 30-minute delivery networks.
“The operating income of Walmart International declined 9.8% to $1.2 billion, affected by strategic growth investments in India, Canada, and Mexico,” the company said.
During the Q2 earnings call, John David Rainey, chief financial officer and executive vice president of Walmart said gross profit rate declined with continued pressure from channel and format mix in the international business, MoneyControl reported.
It is pertinent to note that India has been one of the fastest-growing markets of Walmart in recent quarters. Ecommerce majors Myntra and Flipkart helped the company in driving international top-line growth of 10.5% in the June quarter.
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“If you look at India, we now have 300 minute-fulfilment centres (MFCs), which enables us to get to the customer in less than 15 minutes. And we have 60 MFCs for Myntra, which enables them to be able to get to the customer in under 30 minutes,” said Kathryn J McLay, president and CEO of Walmart International, as quoted by the news publication.
“The company is positioning itself to take advantage of growth into the quick commerce channel, while managing efficiency by placing third-party inventory closer to consumers,” McLay added.
The company’s India bets have been fuelled by a series of internal fund infusions in the last year. In May, Flipkart Internet secured ₹2,225 crore from its Singapore parent — its fourth such round in just over 12 months. Earlier tranches included ₹3,250 crore in April, ₹1,421 crore in April 2024, and ₹950 crore in March 2024, according to regulatory filings.
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Walmart had acquired 77% majority stake in Flipkart in 2018 for $16 billion, one of the largest deals in India’s ecommerce space. Since then, it has gradually increased its holding and today controls more than 80% of the Bengaluru-based company.
Myntra, meanwhile, raised $125 million in May from FK Myntra Holdings, highlighting Walmart’s intent to strengthen its fashion commerce play with faster deliveries.
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