Walmart Earnings Hit by Inflation, Lowers Forward Guidance

Retail giant Wal-Mart on Tuesday reported worse than expected first-quarter earnings and cut its full-year profit forecast, as surging costs cut into the bottom line of the world’s biggest retailer. WMT said it sees earnings falling by around 1%, compared to a prior forecast of a 5% to 6% increase. The stock was down 7% Premarket.

Walmart Family Guy

“Bottomline results were unexpected and reflect the unusual environment. U.S. inflation levels, particularly in food and fuel,” said CEO Doug McMillon.

Walmart Inc NYSE: WMT: Reported Earnings Before Open Tuesday

 $1.30 Missed $1.48 EPS and $141.57B Missed $139.09 billion forecast in revenue 

Earnings

  • Revenue: $141.57 billion vs. $139.09 billion expected, $138.31 billion Y/Y
  • Adjusted earnings per share: $1.30 vs. $1.48 expected, $1.69 Y/Y
  • Total U.S. comparable sales, excluding gas: +4% vs. +2.26% expected, +6.2% Y/Y 

Walmart Inc NYSE: WMT

Market Reaction – 137.80 -10.41 (-7.02%) Pre market

Highlights

“Bottom-line results were unexpected and reflect the unusual environment,” Walmart’s president and CEO, McMillion said in a press statement. “U.S. inflation levels, particularly in food and fuel, created more pressure on margin mix and operating costs than we expected. We’re adjusting and will balance the needs of our customers for value with the need to deliver profit growth for our future.”

Walmart’s operating expenses as a percentage of net sales also increased by 45 basis points during the quarter, “primarily due to increased wage costs in Walmart U.S.,” the company added.

General merchandise comparable sales grew by just low double-digits on a year-over-year basis during the first quarter, with Walmart noting “softness in discretionary categories” came as the company “lapped strong sales last year due to stimulus spending.”

Grocery comparable sales were also up by low double-digits, though Walmart said it continued to see market share gains in the category over last year.

Source” Walmart, Alphastreet

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