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The blue-chip stock, which has fallen over 8% this year, rose 4%
in premarket trading.
The retailer spooked markets across the globe last month when it
slashed its profit forecast and warned that consumers were
pulling back on discretionary purchases at a far greater pace
than feared as higher prices for everything from toothpaste to
gas hampered their spending power.
That forced Walmart to make steep price cuts on items such as
apparel to try to reduce more than $61 billion worth of
inventory it was sitting on at the end of the first quarter.
Walmart reported inventories of $59.92 billion at the end of the
second quarter ended July 31 that was still 25% above last
year's levels.
"The actions we've taken to improve inventory levels in the
U.S., along with a heavier mix of sales in grocery put pressure
on profit margin for Q2 and our outlook for the year," Walmart
Chief Executive Officer Doug McMillon said.
Walmart now expects fiscal 2023 adjusted earnings per share to
fall 9% to 11%, compared with its previous forecast of a 11% to
13% decline.
Walmart's total revenue rose 8.4% to $152.86 billion in the
second quarter, helped by demand for food and other essential
items. Analysts had estimated revenue of $150.81 billion,
according to IBES data from Refinitiv.
However, discounts on discretionary products, slowing demand for
high-margin items such as appliances, electronics and clothes,
and rising labor costs led to a 6.8% fall in the company's
quarterly operating income to $6.85 billion.
(Reporting by Uday Sampath in Bengaluru and Siddharth Cavale in
New York; Editing by Anil D'Silva)
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