Business

Walmart takes impairment charge of $290 million for Jabong

Updated : November 15, 2019 09:19 AM IST

US retail giant Walmart takes a pre-tax non-cash impairment charge of $290 million for the value of the 'Jabong' trade name in the third quarter.

Walmart logged 2.5 percent rise in revenue at $128 billion for the third quarter while its operating income fell by 5.4 per cent to $4.7 billion.

Walmart takes impairment charge of $290 million for Jabong

US retail giant Walmart has taken a pre-tax non-cash impairment charge of $290 million for the value of the 'Jabong' trade name in the third quarter.

Walmart logged 2.5 percent rise in revenue at $128 billion for the third quarter while its operating income fell by 5.4 per cent to $4.7 billion. Net sales from international operations rose 1.3 per cent to $29.2 billion in the said quarter.

"Excluding the impairment charge related to Jabong, third quarter International operating income was better than plan, but declined 16 percent year-over-year in constant currency and 21 percent on a reported basis due primarily to the expected dilution from Flipkart as well as the overall gross margin and FX pressure," Walmart said.

Last year, Bentonville-based Walmart had picked up 77 per cent stake in Flipkart for $16 billion.

"We continue to see strong growth in both sales and units across both Flipkart and Myntra fashion and remain confident about performance. Since there was value ascribed to the Jabong name at the time of the Flipkart acquisition, we are taking a non-cash impairment charge on the trade name," Walmart said in its earnings.

While Flipkart helped grow Walmart's international sales, it pulled down the operating income for the quarter.

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