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Time of India
12-07-2025
- Business
- Time of India
Flipkart to launch $50 million employee stock buyback; over 7,000 staff may benefit
NEW DELHI: Walmart-owned Flipkart has announced a $50 million employee stock buyback plan that will benefit approximately 7,000–7,500 employees. The move comes as the ecommerce major prepares for a potential IPO filing next year. The buyback will allow employees to liquidate up to 5% of the stock options vested between July 6, 2022, and July 5, 2025. The payout will be at $174.32 per option and is expected to be made in August 2025, Flipkart Group CEO Kalyan Krishnamurthy told employees, according to ET. "Our core businesses are performing well, and quick commerce continues to scale at an unprecedented pace." Krishnamurthy wrote to employees. All active employees as of July 5, 2025, will be eligible for the buyback, which is part of Flipkart's broader strategy to reward and retain talent. Krishnamurthy said that if the company meets key targets committed to the board by the end of the year, it may offer another 5% ESOP buyback in early 2026. "The Board has approved a discretionary ESOP liquidity opportunity (under the Flipkart Stock Option Plan 2012) wherein, all active employees as on July 5, 2025 will have the opportunity to liquidate up to 5% of their outstanding options vested in the last three preceding years, i.e. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Redefine Your Future with a Top Online MBA JAIN Online Learn More Undo between July 6, 2022 to July 5, 2025. The liquidation of the options will be at a price of $174.32 per option, and the payment will be made in August 2025," it said. "Looking ahead, we remain committed to acknowledging your contributions and if we achieve key goals committed to the Board by the end of the year, we will unlock another 5% ESOP Liquidity event early next year. This isn't just about numbers, it's about pushing ourselves to go the extra mile, to innovate boldly and to deliver exceptional value to our customers. Let's rally together, harness our collective energy and make this happen," it added. Flipkart, currently valued at $35 billion, employs around 22,000 people. This latest buyback follows a $700 million ESOP repurchase in 2023, the largest by any Indian internet company to date. Including past buybacks, Flipkart has returned around $1.5 billion to employees through ESOP programs in recent years. The announcement also comes just ahead of Flipkart's flagship Big Billion Days sale, scheduled for October, which is a key revenue driver for the platform. The company is also doubling down on its quick commerce vertical, Flipkart Minutes, which is expected to operate 800 dark stores by the end of 2025. Krishnamurthy highlighted that the company's growth trajectory and commitment to innovation, stating, "this is our way of saying thank you for your unwavering commitment." "Let's always remember that in an industry as dynamic and competitive as ours, past successes are a foundation for future achievements. The opportunities in our country are immense. We must seize them, with agility and a shared commitment to success, forging meaningful growth for all," Krishnamurthy added. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
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Business Standard
06-07-2025
- Business
- Business Standard
Flipkart takes quick commerce beyond metros, aims for 800 dark stores
Flipkart is staking its quick commerce future on India's smaller cities, targeting tier-2 and tier-3 markets that rivals have largely overlooked in their rush to dominate major metros. The Walmart-owned company's Flipkart Minutes service, launched 11 months ago, is already live in 19 cities including Ghaziabad, Guwahati, Jaipur and Kanpur, and aims to operate 800 dark stores by year-end. It has currently reached about 400 dark stores. The expansion is backed by a recent internal funding infusion of approximately ₹3,249 crore. This geographic strategy, which sets it apart from competitors focused on affluent urban consumers, is already showing results. The service is doubling its business every 45 days, putting Flipkart on track to challenge market leaders despite starting later in the 10-minute delivery race. Blinkit currently leads with 1,301 dark stores, followed by Swiggy Instamart with 1,021 and Zepto with over 750—giving Flipkart significant ground to make up in the competitive 10-minute delivery space. 'We are getting a very encouraging response,' Hemant Badri, senior vice-president and head of supply chain at Flipkart Group, told Business Standard. He said the traction in these smaller cities has exceeded expectations. 'We see that Flipkart's loyal customer base as well as new customers are trying it.' The battle for India's quick commerce market is intensifying as consumer expectations shift towards instant gratification. Flipkart's user base now exceeds 500 million across 95 per cent of India's pincodes, giving it a potential advantage in reaching beyond the urban centres where most quick commerce players operate. Fresh produce focus Positioning fresh produce and high-quality perishables at the core of its strategy, Flipkart is leveraging existing infrastructure—fulfilment centres, cold chain logistics, and a 120,000-strong gig workforce—to expand delivery capabilities in underserved markets. 'We are picking from farmers and there are very few players who would assure that quality,' Badri said, highlighting the company's farm-to-fulfilment model that anchors fresh produce offerings around cold chain reliability and affordability. The company sees quick commerce not just as an extension, but as an integrated offering aimed at delivering groceries and essentials within 10 minutes, particularly as India's festive season approaches. Multi-speed delivery 'Whatever you order till 1 p.m., you get it delivered on the same day across 20 cities,' Badri emphasised. To support this expansion, the company recently added a 450,000-square-foot fulfilment centre in Patna and is activating a 140-acre campus in Manesar. These infrastructure investments are critical as Flipkart heads into its flagship Big Billion Days sale around September. Automation drive Behind the expansion, Flipkart is investing heavily in AI and automation across its 100-plus logistics facilities. The company uses proprietary address intelligence models to flag inaccuracies and enable geofencing, allowing its last-mile fleet to operate more efficiently in smaller cities. AI-led replenishment systems predict demand and automate restocking—critical for the Minutes quick commerce model. 'It's very important to predict what is going to sell in which store,' Badri said. The company's Supply Chain Operation Academy trains around 15,000 individuals annually, helping standardise operations as Flipkart deepens its presence beyond major metros. This local workforce development creates job opportunities that allow workers to stay local rather than migrate to metros, Badri noted. Investment race The challenge for Flipkart will be maintaining its rapid growth pace while building the dense network of dark stores needed to compete effectively. With consumer demand spiking during festive periods, the company aims to scale consistently across 'more geographies' while enhancing 'execution, discipline and spread,' Badri said. Whether Flipkart's tier-2 and tier-3 city strategy can generate the revenue density needed to justify massive infrastructure investments remains the key question. But the opportunity is huge. The country's online retail market size may touch $325 billion by 2030—more than four times the $70 billion in 2022—mainly due to rapid growth of e-commerce in tier-2 and tier-3 cities, according to a Deloitte India report. This trend could validate Flipkart's geographic focus.
Yahoo
07-04-2025
- Business
- Yahoo
What Growth Opportunities Does Walmart See for Fiscal 2025?
Overall profitability was impacted in the fourth quarter of fiscal 2025 by Walmart's SG&A spending deleveraging by 46 basis points (bps). Tech investments, greater variable compensation, and higher marketing and utility expenditures across Walmart U.S. were the main causes of the cost increase. The pressure was further increased by transaction-related costs associated with the VIZIO purchase. The time adjustment of Flipkart's Big Billion Days (BBD) event presented cost issues for international operations, and Sam's Club U.S. had to absorb greater labor investments, which are anticipated to have an adverse effect on profitability in the upcoming quarters. Inherent Strength Drives Growth: Walmart's shares have rallied 57.4% in the past year compared with the industry's growth of 55.6%. The company's performance reflects the strength of its highly diversified business, with contributions spanning various segments, markets, channels and formats. It has been benefiting from an increase in both in-store and digital channel traffic, reflecting its adept navigation of the evolving retail landscape. Walmart continued to showcase a robust performance in the fourth quarter of fiscal 2025. The company experienced growth across all business segments, expanding e-commerce, increasing pickup options and accelerating delivery services. Newer ventures like the marketplace, advertising and membership have contributed to diversified profits, reinforcing the resilience of Walmart's business model. It also hiked its annual dividend rate. The company witnessed a 16% increase in global membership income in the quarter. WMT's global advertising business advanced 29%. Together, these upsides reinforce the company's position as a retail powerhouse with a keen eye on sustained success and customer engagement. Road Ahead Looks Bright: For the first quarter of fiscal 2026, Walmart expects consolidated net sales growth of 3-4% (at constant currency or cc). The adjusted operating income is expected to increase 0.5-2% at cc in the quarter. Walmart expects quarterly adjusted EPS to be in the 57-58 cents range. The company recorded an adjusted EPS of 60 cents in the first quarter of fiscal 2025. For fiscal 2026, WMT expects consolidated net sales growth of 3-4% (at cc). The adjusted operating income is expected to increase 3.5-5.5% at cc for the year. Net interest expenses are likely to escalate to $100-$200 million. Walmart expects adjusted earnings per share (EPS) for fiscal 2026 to be in the $2.50-$2.60 range. The company recorded an adjusted EPS of $2.51 in fiscal 2025. Impressive Comp Sales: Walmart has been gaining from its sturdy comp sales, which in turn is driven by its constant expansion efforts and splendid e-commerce performance. The company has been strengthening its physical fleet, which plays a dual role by catering to customers directly and also fulfilling a considerable chunk of the company's e-commerce sales. Walmart has been focused on store remodeling in an attempt to upgrade them with advanced in-store and digital innovations. Additionally, the company has been undertaking several efforts to enhance merchandise assortments. Walmart remodeled 100 U.S. stores in fiscal fourth quarter. The company is also gaining from its compelling pricing strategy, which helps it draw customers. Walmart US reported a 4.6% increase in comparable sales during the quarter, driven by a 20% growth in e-commerce sales and ongoing market share gains across various categories. This growth was primarily fueled by higher customer transactions both in-store and online. The grocery category continues to perform strongly, with mid-single-digit growth, while the health and wellness sector saw impressive mid-teens growth. A significant contributor to this growth was the sales of GLP-1 products, which added approximately one percentage point to the segment's comparable sales, maintaining the trend from previous quarters. Robust E-Commerce Initiatives: Walmart continues to be driven by its strong omnichannel business. From investing in pioneering data analytics to expanding its digital presence and optimizing in-store operations, Walmart leaves no stone unturned. Impressive store proximity to customers has allowed Walmart to use its stores to fulfill e-commerce orders. The company has undertaken several initiatives to enhance e-commerce operations, including buyouts, alliances, and improved delivery and payment systems. In the fourth quarter of fiscal 2025, Walmart's Global e-commerce sales surged 16% as penetration increased across all segments. The upside can be attributed to store-fulfilled pickup and delivery services, along with growth in the U.S. marketplace. Walmart U.S.' e-commerce sales rose 20%, driven by store-fulfilled pickup & delivery and growth in the marketplace as well as its Connect advertising. In Walmart International unit, e-commerce sales went up 4%. E-commerce net sales jumped 24% at Sam's Club U.S., backed by momentum in delivery from the club, with digital penetration at an all-time high. Walmart has been innovating in the supply chain and adding capacity as well as building businesses such as Walmart GoLocal, Walmart Connect, Walmart Luminate, Walmart+ and Walmart Fulfillment Services. Other notable strides in the e-commerce realm include the buyout of a major stake in Flipkart, which has been bolstering its International segment. Walmart's majority stake in India's digital transaction platform, PhonePe, is also worth mentioning. Additionally, the company has made aggressive efforts to expand in the booming online grocery space, which has long been a major contributor to e-commerce sales. Focus on Delivery Services: Walmart has significantly bolstered its delivery capabilities, as exemplified by its Express On-Demand Early Morning Delivery service, Spark Driver platform, partnership with Salesforce, the expansion of the InHome delivery service, investments in DroneUp, the Walmart+ membership program and a pilot with Cruise to test grocery delivery through self-driven all-electric cars. Preceding these endeavors, Walmart introduced Express Delivery in April 2021, and in January 2019, it forged partnerships with Point Pickup, Skipcart, AxleHire and Roadie. Additionally, the acquisition of Parcel in September 2017 was a strategic move to elevate its delivery service. The company's store and curbside pickup options add to customers' convenience. Walmart has expanded its store-fulfilled delivery network, now covering 93% of U.S. households with same-day delivery in the fourth quarter of fiscal 2025. In addition, the company has seen a positive response to its newly launched same-day pharmacy delivery service. As of the fiscal fourth quarter, Walmart U.S. had nearly 4,600 pickup locations and about 4,500 delivery stores. Shareholder-Friendly Moves: Walmart's healthy cash flows have been allowing it to make shareholder-friendly moves. For fiscal 2025, WMT generated an operating cash flow of $36.4 billion and a free cash flow of $12.7 billion. During fourth-quarter fiscal 2025, Walmart's share repurchases amounted to $1.4 billion, representing 15.9 million shares. The remaining share repurchase authorization stands at $12 billion. The company recently announced a 13% increase in its annual dividend for fiscal 2026, raising it to 94 cents per share. Stock Appears Overvalued: Considering the price-to-earnings (P/E) ratio, Walmart looks overvalued compared with the industry. The stock has a trailing 12-month P/E ratio of 35.59, which is above the median level of 29.78 scaled in a year. Meanwhile, the trailing 12-month P/E ratio for the industry and the S&P 500 is 32.80 and 21.52, respectively. Cost Woes to Hurt: Walmart's SG&A expenses deleveraged by 46 basis points (bps) in the fourth quarter of fiscal 2025, impacting overall profitability. The rise in costs was primarily due to tech investments, higher variable pay, and increased spending on marketing and utilities across Walmart U.S. In addition, transaction-related expenses from the VIZIO acquisition added to the pressure. International operations faced cost challenges from the timing shift of Flipkart's Big Billion Days (BBD) event, while Sam's Club U.S. absorbed higher wage investments, which are expected to weigh on profits for the next few quarters. Volatile Currency Movements: Due to high exposure to international markets, Walmart remains prone to volatile currency movements. In the fourth quarter of fiscal 2025, currency headwinds reduced reported sales by 120 bps. Looking ahead to fiscal 2026, the company expects foreign exchange fluctuations to affect sales growth by 100 bps and operating income by 150 bps, posing a potential challenge to profitability. Macroeconomic Concerns: The macroeconomic environment poses a significant challenge to Walmart's growth trajectory. Underlying inflation, combined with stagnant wage growth for lower- to middle-income consumers, creates a tough operating landscape. While Walmart has benefited from its value proposition, the broader economic pressures are leading to shifts in consumer behavior. The company noted deflation in general merchandise and consumables categories in the fiscal fourth quarter that constrained revenue growth in historically high-margin segments. Gurus, being gurus of the markets, have sniffed the frothy valuations of WMT and hadn't added WMT to their portfolios much in the past three years. The glaring and gigantic green bar essentially reflects how some of the Gurus were pulled o the stocks by the increased dividends in that quarter. And the 1.08% yield on the dividend is actually what keeping Gurus content. The target share price for Walmart is $51.68, implying a downside of 40% for investors. Walmart has been able to take actions that are beneficial to its shareholders because of its strong cash flows. WMT produced $36.4 billion in operational cash flow and $12.7 billion in free cash flow for the fiscal year 2025. In the fourth quarter of fiscal 2025, Walmart bought back 15.9 million shares for a total of $1.4 billion. $12 billion is the remaining share buyback authority. The business recently declared that its annual dividend for fiscal 2026 will grow by 13% to 94 cents per share. This article first appeared on GuruFocus. Sign in to access your portfolio
