Under pressure from fuel prices, higher inventory levels and overstaffing, Walmart missed its earnings expectations for the fiscal first quarter.
First-quarter earnings of $1.30 per share missed analysts’ average estimate by 18 cents. This was Walmart’s first quarterly profit miss in five quarters.
Total revenue rose to $141.57 billion from $138.31 billion a year earlier, above Wall Street’s expectations of $138.94 billion.
“Bottom-line results were unexpected and reflect the unusual environment,” Walmart CEO Doug McMillon said in a news release. He explained that U.S. inflation levels, particularly in food and fuel, created more pressure than the company forecast.
“We’re adjusting and will balance the needs of our customers for value with the need to deliver profit growth for our future,” McMillon said.
Inflation levels not seen in almost four decades in the U.S. are still impacting both consumer’s wallets and retailer sales.
Walmart´s inventories jumped 32% to $61.2 billion in the first quarter. The company expects net sales to increase about 4% for the full year after previously anticipating a 3% increase.
After announcing missing its earnings expectations, shares tumbled almost 7% in premarket trading, dragging down other retailers.
Higher wages and more staff coming back to pre-covid schedules are causing operating expenses to rise.
