Walmart has issued its second profit warning in 10 weeks, signalling a sudden deterioration in the US retail environment as inflation bites the price-sensitive consumers on which the world’s largest retailer depends.
“The increasing levels of food and fuel inflation are affecting how customers spend,” said Doug McMillon, Walmart’s chief executive. He said the company had made “good progress” clearing inventory in “hardline” or consumer durable categories — such as appliances and furniture — but was having to increase markdowns on clothing in its US stores.
In a statement made after the close of New York trading — just three weeks before the company is due to report earnings for the three months to June — Walmart warned its operating income would fall by 13-14 per cent in the quarter and by 11-13 per cent over the full year as it discounts merchandise to clear excess inventory.