Walmart sees weaker 2023 results, cautious on economic outlook
Walmart Inc (WMT.N) struck a cautious note in its economic outlook for 2023 on Tuesday, as the retail bellwether forecast full-year earnings below estimates and warned that cautious spending by consumers could pressure profit margins.
Shares of the world’s largest retailer fell 4.6% to $139.75 in premarket trading, as the company continued to battle price hikes from many of its product suppliers in a high-inflation environment.
Higher U.S. consumer prices, amid loftier costs for rental housing and food, have raised fears the U.S. Federal Reserve could further lift borrowing costs to cool domestic demand, leading to an economic downturn in the second half of the year.
“There’s still a lot of trepidation and uncertainty with the economic outlook. Balance sheets are continuing to get thinner, savings rate is roughly half of what it was at a pre-pandemic level and we’ve not been in a situation like this where the Fed is raising at the rate that it does,” Chief Financial Officer John David Rainey told Reuters.
“So, that makes us cautious on the economic outlook because we simply don’t know what we don’t know.”
Walmart forecast earnings of $5.90 to $6.05 per share for the year through January 2024, compared with analysts’ estimates of $6.50 per share, according to Refinitiv IBES data.
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