Walmart, the American supermarket chain, issued a warning on the current financial year, reducing its forecasts for the second quarter and for the full financial year 2023. The group forecasts an 11% to 13% drop in its operating profit, well above the previously expected 1% decline.
The reason? The inflationary context. Due to rising prices, its customers are shifting their focus to spending on food and gas, leaving other goods with generally higher margins behind.
Consequence: the group must offer reductions on goods other than food and gasoline, such as clothing, to be able to sell its stocks. Which is likely to affect its profits.
Walmart, which is due to report final results on Aug. 16, said it now estimates second-quarter adjusted earnings per share to fall about 8% to 9%, down from its previous guidance of flat or slightly higher.
Walmart’s stock fell nearly 10% in electronic trading following the close of the New York Stock Exchange.