NEW YORK (Reuters) -Walmart Inc on Monday said it was cutting its forecast for full-year profit, due to higher sales of lower-margin food products and price cuts to sell inventory in the United States.
Shares of the nation’s largest retailer were down 8% in trading after the bell.
Adjusted earnings per share for the second quarter will decline around 8% to 9% and full-year earnings will fall 11% to 13%. Excluding divestitures, full-year earnings per share are expected to drop 10% to 12%, the company said in a statement.
“The increasing levels of food and fuel inflation are affecting how customers spend … we’re now anticipating more pressure on general merchandise in the back half,” Doug McMillon, Walmart’s chief executive officer, said.
The spiking costs of food is affecting shoppers’ ability to spend on general merchandise categories and requiring more price cuts to move through the inventory, particularly apparel, Walmart said.
The company, however, raised its forecast for Walmart U.S. comparable sales, owing to a double-digit inflation in food prices, which it said was higher than at the end of the last quarter.
It now expects comparable sales excluding fuel to rise about 6%, up from its prior guidance of 4% to 5% growth.
(Reporting by Siddharth Cavale in New York and Deborah Sophia in Bengaluru; Editing by Anil D’Silva and Lisa Shumaker)