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Walmart cuts Q2, full-year profit forecasts, citing inflation shares fall

·1 min read

Walmart on Monday lowered its profit outlook for the second quarter and the full year, saying soaring inflation is taking a toll on the retail giant.

Shares fell sharply Tuesday morning.

The company announced it expects adjusted earnings per share for Q2 to decline to around 8 or 9%, and drop to the 11- to 13% range for fiscal year 2023.

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Walmart said in its release that double-digit food inflation is higher than it was at the end of last quarter, noting that "this is affecting customers' ability to spend on general merchandise categories and requiring more markdowns to move through the inventory, particularly apparel."

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"The increasing levels of food and fuel inflation are affecting how customers spend, and while we’ve made good progress clearing hard-line categories, apparel in Walmart U.S. is requiring more markdown dollars," Walmart president and CEO Doug McMillon said in a statement.

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"We’re now anticipating more pressure on general merchandise in the back half. However, we’re encouraged by the start we’re seeing on school supplies in Walmart U.S.," he added.

Reuters contributed to this report.