Walmart cuts full-year profit forecast as fuel, labor costs spike

Reuters
·1 min read

May 17 (Reuters) - Walmart Inc cut its full-year profit forecast on Tuesday, signaling a bigger knock to the retail giant's profit margins from surging costs of everything from fuel to labor.

The company has fared better than most rivals in maintaining inventory levels due to its massive scale and negotiating power with suppliers, but costs have soared as it expedited shipments and chartered cargo ships to get products on shelves.

Net income attributable to the company slumped nearly 25% to $2.05 billion in the first quarter ended April 30.

"U.S. inflation levels, particularly in food and fuel, created more pressure on margin mix and operating costs than we expected," Chief Executive Officer Doug McMillon said in a statement.

The company said it expects fiscal 2023 earnings per share to fall about 1%, compared to its previous forecast of a mid-single digit increase.

Walmart's total revenue for the first quarter rose 2.4% to $141.57 billion, beating analysts' average estimate of $138.94 billion, according to IBES data from Refinitiv.

The company has averaged a 4.9% increase in monthly visits since the start of 2022 compared to the same period in 2021, Placer.ai data showed, as price-conscious shoppers, feeling the strain of persistent inflation, increased visits. (Reporting by Uday Sampath in Bengaluru and Siddharth Cavale in New York; Editing by Sriraj Kalluvila)

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