Walmart has shared an update on its finances for Q2 and full fiscal year 2023, lowering its profit outlook for both periods.
The company said that consolidated net sales growth for the second quarter and full year is expected to be about 7.5% and 4.5%, respectively. Operating margin is expected to be about 4.2% for Q2 and 3.8% to 3.9% for FY23. Operating income for Q2 and full year is expected to decline 13 to 14% and 11 to 13% respectively.
“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 U.S. is requiring more markdown dollars,” said Doug McMillon, Walmart Inc. President and CEO. “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 U.S.”
Walmart added that during Q2 2023, “the company made progress reducing inventory, managing prices to reflect certain supply chain costs and inflation, and reducing storage costs associated with a backlog of shipping containers.”
Walmart serves 230 million customers weekly at its more than 10,500 stores and e-commerce sites in 24 countries.