Walmart profit outlook cut on Flipkart purchase
Walmart said Tuesday its $16 billion purchase of Flipkart, an Indian e-commerce company, will trim its full-year earnings by about 25 cents.
The retail giant is now anticipating full-year 2019 adjusted earnings per share, the figure comparable to analysts’ estimates, of $4.65 to $4.80, down from the previous range of $4.90-$5.05. The company's fiscal year ends Jan. 31
For fiscal 2020, Walmart expects comparable sales growth, that is sales from stores that have been open at least one year, of 2.5 percent to 3 percent and expects earnings to decline by a low-single-digit percentage compared to fiscal 2019, also on account of Flipkart.
In May, Walmart acquired a 77 percent stake in Flipkart for $16 billion, its largest-ever deal, to compete with Amazon.com.
Walmart’s growth will have an international focus, with Walmart International expecting to open slightly more than 300 stores, primarily in Mexico and China in its fiscal year 2020, which ends Jan. 31, 2020. Stateside, Walmart expects to open fewer than 10 stores in the same period. Its online push will continue with the company expecting U.S. e-commerce net sales growth to be around 35 percent in fiscal year 2020
In August, Walmart posted its best quarterly U.S. sales growth in a decade and raised its full-year sales and profit outlooks.
The Bentonville, Arkansas-based retailer has benefited from lower unemployment and tax cuts.