Business
Walmart Inc. provides update for second quarter and fiscal year 2023
Company lowers profit outlook for Q2 and FY23 Operating margin expected to be about 4.2% for Q2 and 3.8% to 3.9% for FY23 Outlook for net sales higher for
About this update from Walmart Inc.
[{"type":"text","content":"\nCompany lowers profit outlook for Q2 and FY23\n\nOperating margin expected to be about 4.2% for Q2 and 3.8% to 3.9% for FY23\n\nOutlook for net sales higher for FY23 given Q2 results, elevated by inflation\n\n BENTONVILLE, Ark.--(BUSINESS WIRE)--\nWalmart Inc. (NYSE: WMT) provided a business update today and revised its outlook for profit for the second-quarter and full-year, primarily due to pricing actions aimed to improve inventory levels at Walmart and Sam’s Club in the U.S. and mix of sales.\n\nComp sales for Walmart U.S., excluding fuel, are expected to be about 6% for the second quarter. This is higher than previously expected with a heavier mix of food and consumables, which is negatively affecting gross margin rate. Food inflation is double digits and higher than at the end of Q1. This is affecting customers’ ability to spend on general merchandise categories and requiring more markdowns to move through the inventory, particularly apparel. During the quarter, the company made progress reducing inventory, managing prices to reflect certain supply chain costs and inflation, and reducing storage costs associated with a backlog of shipping containers. Customers are choosing Walmart to save money during this inflationary period, and this is reflected in the company’s continued market share gains in grocery.\n\n“The increasing levels of food and fuel inflation are affecting how customers spend, and while we’ve made good progress clearing hardline categories, apparel in Walmart U.S. is requiring more markdown dollars. We’re now anticipating more pressure on general merchandise in the back half; however, we’re encouraged by the start we’re seeing on school supplies in Walmart U.S.” said Doug McMillon, Walmart Inc. president and chief executive officer.\n\nGuidance updates\n\nBased on the current environment and the company’s outlook for the remainder of the year, it is providing the following updates to its guidance.\n\n\nConsolidated net sales growth for the second quarter and full year is expected to be about 7.5% and 4.5%, respectively. Excluding divestitures1, consolidated net sales growth for the full year is expected to be about 5.5%.\n\n\n\nNet sales include a headwind from currency of about $1 billion in the second quarter. Based on current exchange rates, the company expects a $1.8 billion headwind in the second half...