“We expect category mix to remain a gross margin headwind for the balance of FY 2024.”

In context

“gle-digits. Now on margins, consolidated gross margins decreased 18 basis points with ongoing pressure from category sales mix globally. This headwind was partially offset by a reduction in supply chain and freight costs relative to last year's heightened levels. Category mix was a notable headwind across geographies and formats. Walmart U.S. general merchandise sales declined mid-single-digits while food and consumable sales increased low double-digits. Headline inflation and food and consumables came down over 400 basis points from the start of Q1 to the end of the quarter. But prices remain high and customers are being cautious with their spend in discretionary categories. And while we make attractive margins in food and consumables, they have a lower margin than general merchandise. We expect category mix to remain a gross margin headwind for the balance of FY 2024. The higher margin initiatives that are connected to our core Omni retail business, including marketplace, advertising, and membership continue to meaningfully outgrow the base. I'll discuss each of these. First, marketplace and fulfillment services. We're growing our marketplace with new items and sellers and an improved experience. We've increased seller counts in the U.S. by more than 40% year-over-year and the number using Walmart fulfillment services has more than doubled. We're adding higher profile in demand brands that our customers are searching for but not typically distributed at Walmart elevating our profile as a digital shopping destination. And in India, Flipkart's e-commerce platform continues to scale, growing first time e-commerce customers and expanding its reach in tier”