Reportedly, Walmart Stores, Inc. (WMT) cut its quarterly and full-year profit guidance weeks ahead of its earnings report, as inflation is causing shoppers to reportedly spend more on necessities such as food and less on items like clothing and electronics. The shift in spending has left more items on store shelves and warehouses forcing the retailer to aggressively mark down items that customers don’t want. Walmart now anticipates adjusted earnings per share for the second quarter and full year to decline around 8% to 9% and 11% to 13%, respectively.
Walmart, which is the biggest grocer in the U.S. and often considered a bellwether for the overall economy, said more customers are turning to its stores, which are known for low prices, to fill their pantries and fridges, and they are skipping over general merchandise that they can live without. The merchandise mix is expected to weigh on the company, as groceries have lower profit margins than discretionary items, such as TVs and clothing.
Walmart said it now expects same-store sales in the U.S. to rise by about 6% in the second quarter, higher than the 4% to 5% increase that the company previously expected, excluding fuel.
Walmart Stores, Inc. (WMT) is a worldwide retailer that operates in various formats. The three segments of the company include Walmart U.S., Walmart International, and Sam’s Club. The company is comprised of discount stores, supermarkets, supercenters, hypermarkets, warehouse clubs, cash and carry stores, home improvement stores, specialty electronics stores, apparel stores, drug stores, convenience stores, membership-only warehouse clubs; and retail Websites. To learn more about Walmart (WMT) and to continue to track its progress please visit the Vista Partners Walmart Coverage Page.
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