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Walmart Revises Outlook, Cites 'Double Digit' Inflation

By Steve Wynne-Jones
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Walmart Revises Outlook, Cites 'Double Digit' Inflation

Retail giant Walmart has said that it expects comparative sales for the second quarter of its financial year to be 6% higher, driven by food inflation that is now in 'double digits' and higher than at the end of Q1.

The group said that this inflationary situation is affecting shoppers' ability to spend, particularly in general merchandise, and requiring more markdowns in some categories.

During the most recent quarter, the company said that it 'made progress' in reducing its inventory, managing prices to reflect supply chain costs and inflation, and reducing storage costs.

Influencing Shopper Behaviour

“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 U.S. is requiring more markdown dollars," commented Doug McMillon, Walmart president and chief executive officer.

"We’re now anticipating more pressure on general merchandise in the back half."


Read More: Walmart Says Some Suppliers Working With Retailer To Cut Prices

Sales And Profit Outlook

Consolidated net sales growth for the second quarter is expected to come in at 7.5%, while full-year sales growth will likely be 4.5%, or 5.5% excluding divestures.

This net sales growth includes a currency headwind, Walmart added, of around $1 billion in the second quarter, and $1.8 billion over the full year.

The retailer anticipates a drop in operating income for both the the second quarter and full year - in the second quarter, operating income is expected to be down 13% to 14%, while over the full year, a 11% to 13% decline is anticipated.

© 2022 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.

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