Shares of American Walmart Inc. plunge more than 8%. in online trading after the company announced it had revised downwards its full-year earnings forecast.
In particular, the retail giant announced that it now expects adjusted earnings per share to decline by 8% to 9% in the second quarter and by 11% to 13% for the full year. The previous forecast was for unchanged or slightly increased profitability in the second quarter with a slight decline of 1% on the year.
“Food inflation is in double digits and has increased since the end of the first quarter,” the company said in a statement released to the public. “This affects consumers’ ability to spend in general product categories and calls for further reductions in inventory, particularly in apparel.”
At the same time, Walmart said it expects consolidated net sales to rise 7.5% in the second quarter and 4.5% for the full year.
Walmart also expects to see the impact from foreign exchange rates reach about $1 billion in the second quarter.
Source: Capital
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