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Sounding an alarm that inflation is hurting its shoppers and forcing them to change what they spend on, Walmart cut its forecast for full-year profit, saying it expects its adjusted earnings per share to drop as much as 13%.
Inflation is leading customers to spend more on food and less on higher-margin merchandise, Walmart said in a filing. That change in consumer spending has forced Walmart to cut prices on items like apparel in order to reduce its inventory.
Walmart’s stock tumbled over 9% in extended trade, and other big retailers also sold off. Target (NYSE:TGT) fell over 5% and Amazon (NASDAQ:AMZN) was down about 4%. Meanwhile Costco Wholesale Corp (NASDAQ:COST), Best Buy, Dollar General (NYSE:DG) and Dollar Tree (NASDAQ:DLTR) each declined more than 3%. Home Depot (NYSE:HD) fell almost 2%.
Together, U.S. retailers were down more than $100 billion in stock market value, based on the after-hours declines in their share prices, with Amazon and Walmart accounting for the vast majority of that decline.
Monday’s after-hours slide in retailers’ shares adds to a 24% drop in the S&P 500 retailing index so far in 2022.
