Walmart announced after the bell on Monday that it now expects same-store sales in the U.S. to rise by about 6% in the second quarter, excluding fuel. The company blamed the move on rising inflation, particularly in food and fuel, which it said are affecting how its customers spend.
As consumers spend more on necessities, they’re spending less on non-essential items, spurring discounts.
“The increasing levels of food and fuel inflation are affecting how customers spend, and while we’ve made good progress clearing hardline categories, apparel in Walmart U.S. is requiring more markdown dollars,” CEO Doug McMillon said in a news release.
The guidance cut comes days before Amazon is expected to report second-quarter earnings on Thursday. Wall Street will be watching closely for any signs of how the e-commerce giant is navigating macro pressures from inflation, slower consumer discretionary spending and ongoing supply chain constraints.
During last quarter’s earnings call, Amazon CFO Brian Olsavsky was asked whether the company is seeing any weakness in consumer spending. Olsavsky said Amazon had not seen any softness.
Walmart’s stock fell more than 8% in extended trading. The announcement also spooked investors in other retailers. Shares of Target and Costco slid as much as 5% and 2% after hours, respectively, while Nordstrom‘s stock was down as much as 3%.
Melissa Repko contributed to this report.