Deconsolidation and negative currency rates
Walmart’s (WMT) international business marked a strong comeback and reported healthy sales growth in the past several quarters. However, the third-quarter sales fell YoY (year-over-year), which reflects the negative impact from unfavorable currency exchange rates and the sales of the majority stake in Walmart’s Brazilian operation. Underlying sales remained strong with nine out of ten markets reporting positive comps.
During the reported quarter, Walmart’s international sales decreased 2.6% YoY to $28.8 billion, which reflects a $1.3 billion negative impact from the sale of the majority stake in Walmart Brazil and a $1.2 billion negative impact from unfavorable currency rates.
Sales by region
The net sales in Walmart’s Walmex region (Mexico and Central America) continued to impress. The sales increased 7.2% due to a 5.4% increase in the comps. In Mexico, the comps rose 6.3% due to the higher traffic and ticket size. On a two-year stack basis, the comps increased 13.5%. Omnichannel offerings, the launch of a new online grocery platform, and a rise in the number of marketplace sellers drove the segment’s sales.
Walmart’s net sales in China increased 4.3% due to higher comps (+2.2%). Continued momentum in Sam’s Club, flagship stores on JD.com, and the expanded one-hour delivery service drove the top-line growth. At the end of the third quarter, Walmart expanded the one-hour delivery service through Dada-JD Daojia to 230 stores.
The net sales in Canada grew 2.8%, which reflected a 2.5% increase in the comps. Expanded online grocery pickup services and doorstep delivery drove the higher traffic and ticket size.
In the United Kingdom, the net sales rose 3.7% led by private label brands, price investments, and omnichannel offerings. The comps increased 2.0% during the reported quarter.