Walmart’s Quarterly Profit Falls, US Growth Lags Behind Expectations

American retail company Walmart saw its net profit drop by approximately nine percent year-on-year to $6.37 billion in the second quarter. The company announced this in today’s earnings report. Total revenue increased by nearly six percent to $187.9 billion. However, growth in the key domestic market, the United States, fell short of expectations. The company’s stock reacted to the release of the financial results with a sharp decline.

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Walmart’s US sales growth slows, but company still improves full-year outlook

Walmart operates the world’s largest retail chain by revenue. The company said today that sales at its US stores open for more than a year increased by 2.6 percent in the second quarter. Growth thus slowed from 4.1 percent in the first quarter and fell short of analysts’ expectations, which they estimated at 3.8 percent according to LSEG.

However, Walmart slightly improved its full-year outlook today. Company CEO John Furner also pointed to strong growth in the e-commerce division. The company now expects its full-year net revenue to increase by four to five percent, while it previously estimated growth at 3.5 to 4.5 percent.

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Warning signal from the US: Retail sales decline and consumer confidence plummets

Walmart’s results are considered an important indicator of consumer spending trends in the United States, the AP agency noted. The US Department of Commerce announced last week that retail sales in the US fell by 0.6 percent in July. This marked the sharpest decline since last May.

Consumer spending in the US accounts for more than two-thirds of economic activity. Preliminary results from a University of Michigan survey last week showed that consumer confidence in the United States dropped significantly in August. According to the survey, American households are concerned about increased living costs due to the Middle East conflict, which has led to rising fuel prices.

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Source: ČTK

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