Walmart is quietly retreating in Japan, Argentina, and the UK as the US retail giant pivots to more lucrative international markets

• Walmart enjoys a global reach, but it's recently reshuffled its international strategy.
• The company has made a number of divestitures in Argentina, Japan, and the United Kingdom.
• Meanwhile, Canada, China, India, and Mexico remain at the forefront of its international strategy.

Walmart International has undergone some major continental drift in recent months. On the retail giant's Tuesday earnings call, executives discussed the company's strategic divestments in the United Kingdom, Japan, and Argentina with investors.

"Our international team has been busy transitioning the portfolio to higher growth markets, and it's working," Walmart CEO Doug McMillon said.

For the most part, that's meant divesting from less lucrative markets, and doubling down on more promising ventures around the world. In November 2020, Walmart Argentina was acquired by Grupo de Narváez, a corporation that runs retail companies in Argentina, Ecuador, and Uruguay. In the United Kingdom, Walmart completed the sale of its wholly owned grocery chain Asda in February 2021.

Rather than pulling out of certain international markets entirely, Walmart has also employed the strategy of relying more on partnerships with local businesses. For example, in 2020, Walmart sold off most of its stake in Japanese grocer Seiyu to investment firm KKR and digital commerce company Rakuten. Walmart continues to collaborate with Rakuten, and the companies still operate an online delivery service together.

Overall, the divestitures saw Walmart International undergo 11% year-over-year dip in net sales for the quarter. Minus the divestitures, net sales grew 5.1%. McMillon said that the net sales numbers were "good results."

"The benefit of strategic portfolio realignment to focus on higher growth markets is becoming more evident in top line growth," Walmart Chief Financial Officer Brett Biggs said. "E-commerce sales increased approximately 64% and penetration grew more than 570 basis points to about 16% of sales."

On an international basis, Walmart executives said the company is showing "strength in India, Canada, and China, despite many markets being negatively affected toward the end of the quarter by a resurgence of COVID."

Canada, China, India, and Mexico are all international markets highlighted positively in the earnings call. Walmart currently has a major stake in Indian digital giants Flipkart and PhonePe. The company touted its "strong sales" in Mexico, and WalMex's 166% spike in e-commerce sales. In Canada, McMillon said that the retailer enjoyed "good" results, despite the country's COVID-19 lockdown measures.

The retail CEO also said that China saw strong performance for e-commerce and Sam's Club, as well as a double digit comparative sales growth that was "helped by a strong Chinese New Year."