American retailer Walmart has lowered its profit outlook for the second quarter (Q2) of fiscal 2022-23 (FY23) as well as the entire FY23. Consolidated net sales growth for Q2 and full year is expected to be about 7.5 per cent and 4.5 per cent, respectively. Excluding divestitures, consolidated net sales growth for the full year is expected to be about 5.5 per cent.

Net 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 of the year. The company maintains its expectations for Walmart US comp sales growth, excluding fuel, of about 3 per cent in the back half of the year. Comp sales for Walmart US, excluding fuel, are expected to be about 6 per cent for the second quarter, Walmart said in a media release.

The operating margin for Q2 is expected to be about 4.2 per cent, while that for the whole fiscal will be in the range of 3.8-3.9 per cent. Operating income for the second-quarter and full-year is expected to decline 13 to 14 per cent and 11 to 13 per cent, respectively. Excluding divestitures, operating income for the full year is expected to decline 10 to 12 per cent.

Adjusted earnings per share for Q2 and full year is expected to decline around 8 to 9 per cent and 11 to 13 per cent, respectively. Excluding divestitures, adjusted earnings per share for the full year is expected to decline 10 to 12 per cent.

“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 US 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 US,” said Doug McMillon, Walmart Inc. president and chief executive officer.

Fibre2Fashion News Desk (KD)

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