by Uday Sampath Kumar and Siddharth Cavale
Aug 16 (Reuters) – Walmart said on Tuesday it expects a smaller fall in its annual profit than it had forecast last month, as discounts intended to dispose of goods and lower fuel prices helped it to generate higher-than-expected revenue for the quarter.
The stock, which has fallen more than 8% this year, was up 4% in trading before the open.
Last month, the number one retailer in the United States worried the markets by revising its outlook downwards, due to the negative impact of rising prices on customer purchases.
But Walmart said on Tuesday it now expects adjusted earnings per share for fiscal year 2023 to fall 9-11%, down from a previously forecast of an 11%-13% drop.
The group was forced to cut prices on some items to reduce inventory, which was worth more than $61 billion at the end of the first quarter.
At the end of July, inventories still amounted to 59.92 billion dollars, or 25% more than in the same period last year.
Total group revenue rose 8.4% to $152.86 billion (€150.99 billion) in the second quarter, driven by demand for food and other essentials . Analysts had expected $150.81 billion, according to IBES data from Refinitif.
However, discounts on non-essential products, slowing demand for high-margin items such as appliances, electronics and clothing, and rising labor costs have led to a operating profit fell 6.8% to $6.85 billion. (Reportage Uday Sampath in Bangalore and Siddharth Cavale in New York; French version Valentine Baldassari, edited by Jean-Michel Bélot)