Walmart Tumbles Most In S&P 500 As Forecast Warning Sows Gloom

Walmart Tumbles Most In S&P 500 As Forecast Warning Sows Gloom

Walmart Inc fell after a surprise cut to its profit outlook that contrasted sharply with upbeat results from Coca-Cola Co and McDonald's Corp. Taken together, the business updates suggest consumers have little leftover for discretionary goods as they spend more on food and fuel. The retailer's adjusted earnings per share would fall as much as 13% in the current fiscal year as US shoppers spurned big-ticket items and focused on buying less profitable groceries with consumer prices soaring, Walmart said. Two months ago, the company said earnings per share would only dip about 1%. In February, it predicted a modest increase. Operating income will fall 13% to 14% for the quarter and 11% to 13% for the full year, Walmart said. The retailer reports earnings on Aug 16. Target cut its profit forecast last month, citing the cost of whittling merchandise stockpiles that its customers were increasingly reluctant to buy as inflation hit a four-decade high. Walmart said it was feeling similar pain as it slashed prices on some goods such as apparel. "This will potentially send shock waves through the sector," said GlobalData's Neil Saunders. "When things go wrong at Walmart, you can extrapolate that it's happening at other retailers, as well."