Retail giant Walmart on Thursday cut down its profit guidance for the fourth quarter by 10 cents a share after putting off a six-year old venture with Bharti Retail in India and closing 50 stores in Brazil and China.
“Two items impact our guidance by approximately $0.10 per share. The net impact (of scrapping the India venture) is expected to be dilutive to earnings per share by approximately $0.04,” Walmart said in a statement.
For the fourth quarter, Walmart expects earnings per share to be in the range of $ 1.50 to $ 1.60, it said.
The US retail giant has sought clarifications about local sourcing norms for foreign players after the Indian government allowed 51 per cent foreign direct investment in multi-brand retailing in September last year.
Walmart and Bharti Enterprises said on October 9 they are parting ways in India. The companies agreed to independently own and operate separate business formats and discontinue their franchise agreement in the retail business.
Walmart will buy out its Indian partner in their 50:50 joint venture Bharti Walmart, which runs 20 Best Price Modern Wholesale stores, for an undisclosed sum.Bharti will acquire $100 million of Compulsory Convertible Debentures held by Walmart in Cedar Support Services, a company owned and controlled by the Indian firm. It will run its 'easyday' retail stores on its own.