Business

US : Walmart earnings boosted as discounts draw inflation-hit shoppers

August 17, 2022 1:00 pm

Walmart had recently made steep price cuts on items such as apparel to try to reduce more than $61bn worth of inventory it had at the end of the first quarter. [Source: Aljazeera]

The mega-retailers inventory grew by 25 percent at the end of the second quarter from a year earlier to $59.9bn.

Walmart slightly raised its annual profit forecast on Tuesday, partially reversing a significant decrease from less than a month earlier, as discounts to remove excess inventory and reduced petrol prices helped the mega-retailer surpass quarterly sales projections.

The stock increased 5.2 percent when the New York Stock Exchange opened Tuesday morning. Shares of competing retailers Target, Costco, and Best Buy rose, as well.

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Last month, Walmart shares dropped nearly 9 percent after the company cut its profit outlook for the second quarter and the full year, underscoring that rising prices for food and petrol are forcing shoppers to cut back on items such as clothing that carry higher profit margins.

Walmart had recently made steep price cuts on items such as apparel to try to reduce more than $61bn worth of inventory it had at the end of the first quarter.

Other major US retailers such as Target and Best Buy have also reported finding challenges in moving excess merchandise.

Walmart reported inventories of $59.92bn at the end of the second quarter on July 31. That was 25 percent above last year’s levels.