The world’s biggest retailer is known for being careful about costs. But that’s harder to do when prices for everything are risingWalmart just highlighted the dark side of inflation. The world’s biggest retailer on Tuesday reported profit that fell short of Wall Street expectations and downgraded its outlook for full-year earnings per share from a mid-single digit increase to a 1% decline.
Inflation is usually a benefit to supermarkets and consumer-goods companies, as higher prices elevate the value of their sales. If they can keep volumes stable, then their same-store sales automatically rise. Indeed, this is exactly what happened at Walmart: US same-store sales excluding fuel rose 3% compared with a year ago, topping analysts’ estimates of a 2% increase.
Second, it sold less clothing and home furnishings than expected, and these are some of its more profitable categories. It had stocked up on such items amid last year’s supply chain snarl-ups, and inventories were up about a third to $61.2bn. The squeeze of inflation on discretionary incomes is starting to affect what consumers buy. Because Americans were having to spend more on food, they cut back on clothing and home furnishings more than Walmart had expected. Unseasonably cool weather, affecting items such as apparel and patio furniture, didn’t help either.
The group should be able to work through its high stock levels in the coming quarters. It helps that it is facing these issues at the start of the summer season rather than the end. And its focus on value should help it win over more customers.
South Africa South Africa Latest News, South Africa South Africa Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
MARKET WRAP: Rand, JSE firm as sentiment picks upPositive news from China and strong earnings by US retailers bolsters markets, but analysts warn the positive mood could prove temporary I am super excited right now, I can now pay my bills and take good care of my family.. Thank you for bringing happiness to my home with just $5000 i got $50,000 in 7days Williamchurch07
Source: BDliveSA - 🏆 12. / 63 Read more »