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The company’s shares fell 6.5% to $138.51 in premarket trading.
Walmart (NYSE:WMT) has fared better than most rivals in maintaining inventory levels due to its massive scale and negotiating power with suppliers, but costs have soared as it expedited shipments and chartered cargo ships to get products on shelves.
An increase in wage costs led to operating expenses as a percentage of net sales rising by 45 basis points in the first quarter, Walmart said.
Net income attributable to the company slumped nearly 25% to $2.05 billion in the three months ended April 30.
“U.S. inflation levels, particularly in food and fuel, created more pressure on margin mix and operating costs than we expected,” Chief Executive Officer Doug McMillon said in a statement.
The company said it expects fiscal 2023 earnings per share to fall about 1%, compared to its previous forecast of a mid-single digit increase.
Walmart also tempered its second-quarter earnings expectations. The company now estimated earnings per share to be flat to up slightly, compared to a previous forecast of a low to mid-single digit increase.
Total revenue for the first quarter rose 2.4% to $141.57 billion, beating analysts’ average estimate of $138.94 billion, according to IBES data from Refinitiv.
Walmart has averaged a 4.9% increase in monthly visits since the start of 2022 compared to the same period in 2021, Placer.ai data showed, as its resistance to raising prices pulled in more price-conscious shoppers feeling the strain of persistent inflation.
