Walmart Warns on Profits After Slashing Prices

Walmart (NYSE:WMT) shares fell in after-hours trading on Monday after the retailer warned on performance after slashing prices to get rid of excess inventory as inflation depressed consumer spending, particularly on apparel.

Walmart fell more than 8% in after-hours trading. Net sales growth for the second quarter and full year is expected to be about 7.5% and 4.5%, respectively. This compares with an earlier forecast of sales growth of more than 5% for the full year. The new guidance follows "pricing actions aimed at improving inventory levels and sales mix at Walmart and Sam's Club in the US," the company said in a statement. "Rising levels of food and fuel inflation are impacting how customers are spending, and while we have made good progress in clearing difficult categories, further discounts to apparel are needed at Walmart US," it added. Adjusted EPS for the second quarter and full year are expected to decline by about 8 to 9% and 11 to 13%, respectively. The company had previously forecast EPS to be flat to slightly higher.