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Walmart Earnings Indicate Increased Cost Pressures

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  • Taking a closer look at the Walmart earnings release - worth noting their gross profit rate took a hit of around 12bps - reflecting increased costs across their supply chains. They also note that lower markdowns and an increased contribution from advertising offset any cost pressures - suggesting the supply chain squeeze is more acute than initially appears.
  • They also warn that merchants are to continue working with suppliers and monitor price gaps in order to police margins appropriately.
  • Their sales growth was also pinned partly on "low-to-mid single digit ticket inflation"
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com

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