Walmart falls back on Wall Street, as margins set to suffer

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( — walmart stumbles 4% before trading on Wall Street. The American retail giant did not convince with its latest quarterly financial publication. The group reported strong demand in the quarter ended Jan. 31, posting total revenue of more than $164 billion, up 7.3% from a year earlier. . Analysts had estimated revenue at $159.8 billion. Quarterly net profit soared 76% to $6.28 billion, helped by unrealized gains in stocks and other investments.

walmart however, on Tuesday delivered below-consensus full-year earnings estimates, saying it was cautious about the economic outlook for 2023 and that consumers were likely to continue buying items at lower prices – which could put pressure on its margins. The group, which operates more than 5,000 stores in the United States, uses its power to negotiate better prices with suppliers and face discount competition. However, discounts, along with weak consumer morale and Walmart’s decision to raise employee salaries, are expected to weigh on its margins this year. Walmart is forecasting fiscal 2024 earnings of $5.90 to $6.05 per share, versus analyst estimates of $6.50.

The consolidated gross margin rate decreased by 83 basis points during the holiday quarter, mainly due to markdowns and sales of low-margin products. There is also no guarantee that Walmart will be able to keep prices low enough to stimulate demand, as some major suppliers, including Nestlé, Coca-Cola and Procter & Gamble, have confirmed plans for further price hikes. price.


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