Shares of Wal-Mart fall after company lowers profit outlook

The outlook for retail is worsening as Wal-Mart announced a lower profit outlook for Q2 and for its 2023 fiscal year.

Shares of WMT are down to $120.83 from $132 at the close, a decline of more than 8%.

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

Broad equity indexes are lower on this news, which was pre-announced. It highlights that consumers have stopped spending on goods as they get squeezed by inflation and shift to services spending.

The silver lining is that markdowns are deflationary and will help get inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term back to target. That could mean fewer Fed rate hikes.

As for the company and stock markets, this is a sign that retail could be getting hit hard. The company sees full year EPS down 10-12% compared to mid-May when it was forecasting a decline of 1%. Wal-Mart has some insulation from groceries, which are essential but other retailers do not and that could lead to big misses elsewhere.