[ad_1]
The front desk of the Amazon office is pictured in New York, May 1, 2019.
Carlo Allegri | Reuters
Shares of Amazon fell more than 4% in extended trading on Monday after Walmart said it was lowering its quarterly and full-year profit guidance.
Walmart announced after the bell on Monday that it now expects adjusted earnings per share for the second quarter and full year to slide around 8% to 9% and 11% to 13%, respectively. Previously, it had forecast them to be flat to up slightly for the second quarter and to drop by 1% for the full year.
The company blamed the move on rising inflation, particularly in food and fuel, which it said are affecting how its customers spend. It also said it expects same-store sales in the U.S. to rise by about 6% in the second quarter, excluding fuel.
As consumers spend more on necessities, they’re spending less on non-essential items, spurring discounts.
“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,” CEO Doug McMillon said in a news release.
The guidance cut comes days before Amazon is expected to report second-quarter earnings on Thursday. Wall Street will be watching closely for any signs of how the e-commerce giant is navigating macro pressures from inflation, slower consumer discretionary spending and ongoing supply chain constraints.
During last quarter’s earnings call, Amazon CFO Brian Olsavsky was asked whether the company is seeing any weakness in consumer spending. Olsavsky said Amazon had not seen any softness.
Walmart’s stock fell more than 8% in extended trading. The announcement also spooked investors in other retailers. Shares of Target and Costco slid as much as 5% and 2% after hours, respectively, while Nordstrom‘s stock was down as much as 3%.
Melissa Repko contributed to this report.
Have you ever looked down at your carpet and wondered if there’s a budget-friendly way…
Counter-Strike 2 (CS2) has elevated the thrill of case openings, captivating both seasoned CS:GO veterans…
Trying to sell a car online should be simple, but sometimes buyers lose interest fast.…
In the hustle and bustle of modern life, finding moments of quiet solace can feel…
You have probably heard on the importance of socializing dog after getting a puppy. It…
The mortgage industry is undergoing a significant transformation, driven by the rise of automation and…