Walmart (WMT) said Tuesday that higher costs and supply chain constraints squeezed its profit during its latest quarter. Walmart also slashed its profit outlook for the year, signaling that it expects inflation to continue to hurt its business.
“Bottom-line results were unexpected and reflect the unusual environment,” Walmart CEO Doug McMillon said in a news release. “U.S. inflation levels, particularly in food and fuel, created more pressure” than the company predicted.
The results drove Walmart’s stock down 7% during pre-market trading Tuesday. Walmart, America’s largest retailer and employer, is an economic bellwether.
Walmart’s net income fell 25% to $2 billion during its latest quarter ending April 30 compared with the same stretch a year ago.
In February, Walmart said it expected its profit to increase by about 3% this year. But Walmart now expects profit to decease by about 1%.