Walmart issues profit warning amid bubbling recession fears
Published: 03:42 26 Jul 2022 EDT
US retail giant Walmart has issued a profit warning in the lead up to its second-quarter results next month amid rising inflation, added supply chain costs and reduced spending on general merchandise.
Profit margins are expected to take a hit, while earnings per share could decline up to 9% for the quarter.
“The increasing levels of food and fuel inflation are affecting how customers spend, and while we’ve made good progress clearing hardline categories, apparel in Walmart US is requiring more markdown dollars. We’re now anticipating more pressure on general merchandise in the back half,” said CEO Doug McMillon.
Market response
Analysts at Shore Capital called the news a “warning sign for other retail companies,” while Deutsche Bank analysts noted that the consumer discretionary segment is reacting to “bubbling recession fears”.
NASDAQ-listed WMT shares responded with a sharp 9.9% downturn in Monday’s after-hours trade.
