Business

Walmart cuts profit guidance as inflation forces shoppers to spend more on food


Walmart on Monday cut its quarterly and full-year profit guidance, saying inflation is causing shoppers to spend more on necessities like food and less on items like clothing and electricity. death.

The company’s shares fell about 8% after hours. It also pulled down stocks of other retailers, including Targetdown more than 5%. Amazon down more than 3%. Macy’s, Kohl’s and Nordstrom each fell more than 3% after hours, as investors sought to weed out stocks that primarily sell apparel and home goods. Distance decrease by about 2%.

Walmart said it now expects sales at similar stores in the US to grow about 6% in the second quarter, excluding fuel, as customers buy more groceries. This is higher than the 4 to 5 percent increase the company previously expected.

However, that combination of goods will affect the company’s bottom line. Food has lower margins than discretionary items, such as TVs and clothing.

CEO Doug McMillon said: “Increasing levels of food and fuel inflation are affecting how customers spend, and while we’ve made good progress in clearing tough categories, apparel at Walmart US is demanding more US dollars”.

He said the company is seeing strong back-to-school sales in the US, but predicts people will return to buying general merchandise in the second half of the year.

The company’s shares fell about 8% after hours. It also pulled down stocks of other retailers, including Targetdown more than 4%. Amazon down more than 3%. Macy’s, Kohl’s and Nordstrom each fell more than 3% after hours, as investors sought to weed out stocks that primarily sell apparel and home goods. Distance decrease by about 2%.

Read the full release here.

– Lauren Thomas of CNBC contributed to this report.

This is breaking news. Please check back for updates.



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