Walmart Earnings Hit by Higher Costs

Walmart Inc's revenues increased in the previous quarter, but the rising product, supply chain, and labor costs weighed on profits.

The company said on Tuesday that US equivalent sales from stores or digital channels that have been open for at least 12 months increased 3% in the quarter ended April 29, driven by the strength of the grocery category. According to the company, US transactions were flat this quarter, but issuance increased by 3%.

In a press release, Walmart CEO Doug McMillon said, "The end result is unexpected and reflects the unusual environment, as sales of the country's largest retailer increased." "Inflation put more pressure on margins than the company expected, especially in food and fuel and we are adjusting," he added.

Net income was $2.05 billion, down nearly 25% from the year-ago quarter. Total revenue increased 2.4% to $141.57 billion. Walmart has raised its guidance on full-year sales and lowered its full-year earnings forecast. Walmart's share price fell by more than 7% in pre-market transactions.