Connect with us

Hi, what are you looking for?

Business

Walmart reports 25% drop in profits, citing higher costs

Walmart reported a drop in profits citing higher costs for labor, food and fuel in earnings that missed analyst expectations and sent shares lower.

Walmart reported a drop in quarterly profits, showing the impact of wage increases implemented over 2021 in the tight US labor market
Walmart reported a drop in quarterly profits, showing the impact of wage increases implemented over 2021 in the tight US labor market - Copyright GETTY IMAGES NORTH AMERICA/AFP SPENCER PLATT
Walmart reported a drop in quarterly profits, showing the impact of wage increases implemented over 2021 in the tight US labor market - Copyright GETTY IMAGES NORTH AMERICA/AFP SPENCER PLATT

Walmart reported a drop in profits Tuesday, citing higher costs for labor, food and fuel in earnings that missed analyst expectations and sent shares lower.

The retail giant recorded a 25 percent drop in profits to $2.1 billion for the quarter ending April 30, while revenues rose 2.4 percent to $141.6 billion.

Chief Executive Doug McMillon said the profits “were unexpected and reflect the unusual environment,” adding, “We’re adjusting and will balance the need of our customers for value with the need to deliver profit growth for our future.”

The results show the impact of wage increases implemented over the last year in the tight US labor market. McMillon also said higher costs for food and fuel “created more pressure on margin mix and operating costs than we expected.”

Walmart’s revenue at its massive US namesake stores rose just three percent, versus a 5.6 percent jump in the quarter that ended in January, a benchmark known as comparable sales. E-commerce sales growth has also leveled off compared with earlier in the pandemic.

Walmart raised its full-year sales forecast slightly but lowered its profit forecast. It now expects earnings per share to fall one percent after previously projecting an increase in the mid-single digits.

Shares fell 6.8 percent to $138.09 in pre-market trading.

AFP
Written By

With 2,400 staff representing 100 different nationalities, AFP covers the world as a leading global news agency. AFP provides fast, comprehensive and verified coverage of the issues affecting our daily lives.

You may also like:

Tech & Science

The technology provides a new innovative diagnostic option to help tackle a global health emergency, particularly in low- and middle-income countries.

Tech & Science

The conversations with ChatGPT, on Twitter by fascinated users, show a kind of omniscient machine, capable of explaining scientific concepts.

Tech & Science

If something is high value, don’t use your debit card to pay for it. Consumer law in the UK means that you could get...

Business

Traders have welcomed China's moves to further loosen Covid containment measures - Copyright AFP Jade GAOAsian stocks rose and the dollar weakened further as...