U.S. retailers tumbled on Tuesday after a forecast cut from industry bellwether Walmart Inc stoked fears of similar warnings from a sector struggling with the impact of high inflation on consumer spending.
Piper Sandler analysts said in a note they expect outlook downgrades across the retail space, with brands focused on lower- and middle-income consumers weakening the most. Walmart, the biggest private U.S. employer, said annual profit could fall by as much as 13%, adding that it would cut prices of clothing and general merchandise more aggressively to attract investors.
Big box retailer Target, which lowered quarterly profit margin forecast in June and said it would offer deeper discounts to reflect weak demand, will report results next month.
A warning flag of the next recession