WMT Walmart Inc

By Denny Jacob

Walmart Inc. on Monday lowered its outlook for the second quarter and the rest of the year as it deals with high inventory levels and inflation.

The retailer said net sales in the second quarter included a currency headwind of about $1 billion. Walmart said it expects a $1.8 billion headwind in the second half of the year based on current exchange rates.

Walmart said comp sales for Walmart U.S., excluding fuel, are expected to be about 6% for the second quarter. The company said this is higher than previously expected due to a heavier mix of food and consumables, which is negatively affecting its gross margin rate.

The Bentonville, Ark.-based company said adjusted earnings per-share for the second quarter and full year are expected to decline 8% to 9% and 11% to 13%, respectively.

Chief Executive Doug McMillon said apparel in Walmart U.S. is requiring more markdown dollars despite making progress clearing hardline categories. Mr. McMillon said the company anticipates more pressure on general merchandise in the back half but is encouraged by the start its seeing on school supplies in Walmart U.S.

Walmart's updated guidance comes as businesses contend with consumers cutting back on spending where they can in response to record-high inflation. The company reports its second-quarter results on Aug. 16.

Shares slipped 8.8% to $120.50 in after-hours trading.

Write to Denny Jacob at denny.jacob@wsj.com

(END) Dow Jones Newswires

July 25, 2022 16:57 ET (20:57 GMT)

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