(Reuters) – Walmart on Tuesday said it expects 2023 full-year profit to be below expectations and warned that consumers’ cautious spending could weigh on profit margins.
The title of the American retail giant fell 1.2% at 2:48 p.m. GMT on Wall Street, the group continuing to suffer from price increases by many of its suppliers in an environment of high inflation.
“There is still a lot of trepidation and uncertainty about the economic outlook. Balance sheets continue to thin, the savings rate is roughly half of what it was before the pandemic and we don’t We’ve never been in a situation like this where the Fed is raising rates at the rate it is doing,” Chief Financial Officer John David Rainey told Reuters.
“So that makes us cautious about the economic outlook.”
Walmart forecasts earnings of $5.90 to $6.05 (5.54 euros-5.68 euros) per share for its fiscal year to the end of January 2024, below analysts’ estimates of $6.50 per share , according to IBES data from Refinitiv.
This forecast incorporates the impact, estimated at 14 cents, of an accounting charge related to inflation moderation in key merchandise categories and reduced inventory levels at its Walmart US and Sam’s Club businesses, said the society.
“Some years our performance will be higher and some years weaker (…) This year will probably be weaker,” the chief financial officer said during a conference call.
However, Walmart reported strong demand in the quarter to Jan. 31, posting total revenue of $164.05 billion, a 7.3% increase from a year ago. Analysts on average expected $159.76 billion.
(Reporting Uday Sampath in Bangalore and Siddharth Cavale and Arriana McLymore in New York; French version Kate Entringer)
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