Walmart Inc. cut its earnings estimates for the year, signaling a bigger blow to the retail giant’s profit margins by rising costs on everything from fuel to labor.
The company’s share is down 6.5% in pre-conference trading.
Walmart did better than most of its competitors in maintaining its stock level due to its huge scale and bargaining power with suppliers but the cost has skyrocketed as it accelerated shipments and put charter ships on the shelf.
Also, the increase in wage costs led to an increase in operating expenses as a percentage of net sales, by 45 basis points in the first quarter.
Net income fell nearly 25 percent to $ 2.05 billion in the quarter to April 30.
The company expects earnings per share for the year 2023 to decrease by 1%, compared to the previous estimate for an increase of medium-single percentage.
Walmart also downgraded its second-quarter earnings expectations. The company now expects earnings per share to be marginally higher or remain unchanged, compared to the previous forecast for low-medium single-digit growth.
Total revenue for the first quarter rose 2.4 percent to $ 141.57 billion, compared with analysts’ estimates of $ 138.94 billion.
Source: Capital
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