Walmart margins hit as inflationary pressures bite across the pond

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Walmart has recorded an uptick in revenues but said its bottom line has been hit by inflation in food and fuel.

Walmart US flag

The American grocery giant reported sales up 2.4% to $141.6bn (£113.5bn), or up 2.6% in constant currency over the 13 weeks to April 29.

In the US, Walmart’s comparable store sales rose 3%, while online sales inched up 1%. Compared with pre-pandemic levels, on a two-year basis, sales were up 9% and 38% respectively.

Sam’s Club sales increased 10.2%, and 17.4% on a two-year basis, while income from its membership club rose 10.5%.

The retailer added that operating income for the period was $5.3bn (£4.2bn), down 23% due to margin pressures and supply chain costs.

Walmart said growth had been negatively impacted by $5m (£4m) due to divestitures including the sale of its businesses in the UK and Japan during the quarter.

Its international arm saw sales fall 13% to $23.8bn (£19.1bn).

Walmart president and chief executive Doug McMillon said: “Across our businesses, we had a strong top-line quarter. We’re grateful to our associates for their hard work and creativity. Bottom-line results were unexpected and reflect the unusual environment.

“US inflation levels, particularly in food and fuel, created more pressure on margin mix and operating costs than we expected. We’re adjusting and will balance the needs of our customers for value with the need to deliver profit growth for our future.”