THE WHAT? Walmart shares have seen their biggest drop in 35 years following the retailer cutting its full-year earnings guidance, prompted by a disappointing Q1.
THE DETAILS Shares fell 11.3 percent to close at US$131.39, which wiped out more than a year of gains, according to The Times.
Inflation is said to have ‘created more pressure’ on margins and costs than the retailer expected, with Doug McMillon, President and Chief Executive stating, “We’re adjusting and will balance the needs of our customers for value with the need to deliver profit growth for the future.”
Walmart reported Q1 earnings per share at US$1.30 adjusted as opposed to US$1.48 expected, while revenue reached US$141.57 billion reported versus US$138.94 billion predicted.
Quarterly net income fell to US$2.05 billion, compared to US2.73 billion in the previous year.
Total revenue rose to US$141.57 billion from US$138.31 billion in the comparable quarter last year.
THE WHY? The jump in fuel prices, higher labor costs and aggressive inventory levels have affected the company, according to Chief Financial Officer Brett Biggs, speaking to CNBC.
The retailer has raised its FY net sales increase to 4 percent from 3 percent, however, has lowered profit expectations. Earnings per share are expected to decrease by around 1 percent as opposed to the mid-single-digit increase previously predicted.