Walmart shares suffered the biggest one-day drop since the eve of the Black Monday stock market crash after the company, cut its earnings guidance following a quarter in which it was wrongfooted by the rapid pace of inflation in the US.
The share price reaction, a particularly severe one by the standards of typically less volatile consumer staple stocks, came after the company revealed profits in its latest quarter had taken an “unexpected” hit owing to higher wages, a jump in fuel costs and softness in general merchandise sales at its US businesses.
As the world’s largest retailer, and long-regarded as a bellwether of the American consumer, Walmart’s commentary comes at a time when investors are scrambling to measure the impact of inflation, rising interest rates and supply chain snarls on the US economy.