Walmart trims Q4 guidance after calling off Bharti venture

New Delhi: Global retail giant Walmart Thursday trimmed its fourth-quarter profit guidance by 10 cents a share after scrapping a six-year venture with Bharti Retail in India and closing 50 stores in Brazil and China.

"Two items impact our guidance by approximately USD 0.10 per share. The net impact (of scrapping the India venture) is expected to be dilutive to earnings per share by approximately USD 0.04," Walmart said in a statement.

For the fourth quarter, Walmart expects earnings per share to be in the range of USD 1.50 to USD 1.60, it said.

The US retail giant has sought clarifications about local sourcing norms for foreign players after the Indian government allowed 51 percent 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 USD 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.

The two partners joined hands in 2007 and launched their first Best Price Modern Wholesale store in Amritsar in 2009.

Walmart today reported Q3 EPS of USD 1.14 as net sales revenue increased 1.6 percent to USD 114.9 billion.