NEW YORK  - Walmart faces a triple challenge as it reports its fiscal first-quarter earnings on Thursday. The $250 billion U.S. retailer is splashing out $16 billion for most of India’s Flipkart even as it continues to exit other overseas forays. Chief Executive Doug McMillon is also up against Amazon.com on his home turf. And he’s promising to keep buying back shares.

Until Flipkart, the Bentonville, Arkansas-based company had trodden gingerly on the M&A front in its quest to catch up with Jeff Bezos’ e-commerce juggernaut. Its biggest splurge on the digital front was $3 billion for U.S. retail startup Jet.com.

Last week, though, McMillon unveiled Walmart’s largest deal ever, and it’s in India. Bold moves in online shopping are necessary. E-commerce is still only a tiny part of Walmart’s overall take. For its fiscal year ending in January, the company raked in nearly $12 billion in U.S. online sales, only a little more than 2 percent of the overall top line of $500 billion.

Yet international markets have sometimes not been kind to Walmart. In 2016, it scaled down ambitious plans in China. It recently decided to sell British grocery subsidiary Asda to rival J Sainsbury and take a minority stake after being in the market for some 20 years. It’s looking to reduce exposure to Brazil, too.

Meanwhile, McMillon’s company – although nearly three times Amazon’s size in terms of 2017 revenue – is under constant pressure from its online rival in the United States, as well as elsewhere. That’s where the CEO’s other obligations come into play.

Even after committing cash to the Flipkart deal, Walmart said it would continue a two-year, $20 billion share repurchase program. All the while investors also expect Walmart to maintain its streak of 45 consecutive annual dividend increases. Over the past five years, Walmart handed shareholders nearly $60 billion in dividends and buybacks.

That’s the equivalent of about four Flipkart deals. Bezos, on the other hand, has his investors trained not to expect dividends or buybacks, so he can invest all his spare cash. The companies are totally different, but at some level it means McMillon has less ammunition for the fight. Walmart is spread thin, and can’t afford many mistakes.

CONTEXT NEWS

- Walmart will release earnings for its fiscal first quarter, the three months to April, on May 17. Analysts are expecting the retailer to report a 2.5 percent rise in revenue to $120.5 billion and earnings of $1.12 per share, according to estimates compiled by Thomson Reuters.

- Walmart said on May 9 it would pay $16 billion for a 77 percent stake in Flipkart, India’s largest e-commerce site.

(Editing by Richard Beales and Amanda Gomez)

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