Walmart said on Tuesday it expects a lower-than-expected annual profit for 2023 and warned that cautious consumer spending could weigh on profit margins.
The U.S. retail giant’s stock was down 1.2 percent at 14:48 GMT on Wall Street as the group continued to suffer from price hikes by many of its suppliers amid high inflation.
“There is still a lot of trepidation and uncertainty about the economic outlook. Balance sheets continue to thin, the savings rate is about half of what it was before the pandemic and we’ve never been in a situation like this where the Fed is raising rates at the pace it is,” CFO John David Rainey in an interview with Reuters.
Walmart expects earnings of $5.90 to $6.05 (5.54 euros-5.68 euros) per share for its fiscal year to the end of January 2024, below analysts’ estimates of $6.50 per share.
The forecast incorporates the impact, estimated at 14 cents, of an accounting charge related to moderating inflation in key merchandise categories and reduced inventory levels in its Walmart U.S. and Sam’s Club businesses, the company said.
“Some years our performance will be stronger and some years it will be weaker…This year will likely be weaker,” the CFO said on a conference call.
However, Walmart reported strong demand in the quarter through Jan. 31, posting total sales of $164.05 billion, up 7.3% from a year ago. Analysts on average were expecting $159.76 billion.