The US retail giant on Nov 20 posted global revenue of US$179.5bil for the fiscal third quarter, up 6% in constant currency. — China Daily
BEIJING: Walmart Inc reported a quarter of strong performance in China, with net sales in the country surging 21.8% to US$6.1bil on the back of Sam’s Club’s rapid expansion and accelerating online demand.
The US retail giant on Nov 20 posted global revenue of US$179.5bil for the fiscal third quarter, up 6% in constant currency, while adjusted operating income rose 8% to US$7.2bil.
Growing 27% worldwide, eCommerce continued to be a major driver.
Its business in China again outperformed Walmart’s global averages.
The company’s net sales reached US$6.1bil, up 21.8% and comparable sales in the market climbed 13.8%, while eCommerce sales jumped 32% and accounted for more than half of Walmart China’s total sales.
Gross margin slipped amid changes in business mix, but stronger sales, a favourable shift in channels and higher operational efficiency helped lower the cost ratio and lift operating profits, the company said.
Much of the momentum continued to come from Sam’s Club, Walmart’s membership warehouse chain, which is emerging as one of the company’s strongest growth engines globally.
Chief financial officer John David Rainey said in the earnings call that sales in China rose 22% in the quarter, reflecting “ongoing strength at Sam’s Club” and eCommerce growth of “more than 30%”.
Sam’s recorded double-digit transaction growth during the quarter and added eight new clubs in the past 12 months, including one opening in the third quarter.
On Nov 21, Sam’s Club China opened a new store in Beijing’s Changping district –the city’s fifth and the company’s 61st nationwide. The retailer is preparing two more openings in December in Shanghai and Guangzhou, Guangdong province.
Each of the stores in Jiaxing of Zhejiang province, Hefei of Anhui province, Zhongshan of Guangdong province and Yangzhou of Jiangsu province is the first entry in each city.
Walmart China said 2025 will be Sam’s Club’s busiest expansion year in China, with 10 new stores planned – the most it has ever opened in a single year. The chain expects to maintain a rapid expansion pace beyond 2025 as its high-income, high-frequency membership model gains traction.
Douglas McMillon, president, chief executive officer and director of Walmart Inc, said during the third quarter earnings call: “The team in China is delivering orders fast. Nearly 80% of digital orders arrive in under an hour. In digital retail, China is more advanced than any other market we operate in.”
He said: “In October, I got to visit three Chinese cities. In Hefei, a city of about 10 million people, we visited a relatively new Sam’s Club that was outstanding. We now have a healthy pipeline of new clubs coming.”
However, the retailer has recently faced consumer backlash over product selection and presentations. The retailer’s app redesign, which altered product images from real photos to retouched “art shots” earlier this year, sparked backlash from consumers. — China Daily/ANN
