2023-11-16 13:58:20
Walmart, the largest U.S. retailer, expressed uncertainty regarding the future, citing signs of softening in domestic consumption at the end of October. As a result, stock prices plummeted.
Walmart announced its financial results on the 16th. “We’re more cautious regarding consumer spending than we were 90 days ago,” Chief Financial Officer John David Rainey said in an interview.
Rainey said the “decline accelerated” in sales during the last two weeks of October. November is off to a good start due to sales and year-end holiday shopping, but rising interest rates and student loan repayments are putting pressure on demand.
“We’re seeing resilience and our market share is growing relative to other companies, but consumers are still being squeezed,” Rainey said.
Walmart’s sales have been stronger than many of its competitors, but the understatement suggests uncertainty around consumer spending. US same store sales (excluding fuel) increased by 4.9% in the August-October (3rd quarter) period. Fellow retailers Target and Home Depot reported lower revenue this week as consumers cut back on discretionary spending.
Walmart stock fell 8.1% in following-hours trading early on the 16th, New York time. The company’s stock price has risen 20% since the beginning of the year.
Walmart also slightly raised its earnings forecast for the full year ending January 2024, up to $6.48 per share on adjusted earnings. Previously, the maximum price was $6.46. The market expectation was $6.48.
However, Rainey said the company’s full-year operating profit growth forecast of 7% to 7.5% remains largely unchanged, and that the final result will likely be at the lower end of the range.
news-rsf-original-reference paywall">Original title:Walmart Lifts Profit Outlook, Stays Cautious on US Consumers(excerpt)
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