A profit warning by Walmart (WMT.N) ignited a sell-off in shares of major U.S. retailers late, quickly evaporating over $100 billion in stock market value in extended trade.
Sounding an alarm that inflation is hurting its shoppers and forcing them to change what they spend on, Walmart cut its forecast for full-year profit, saying it expects its adjusted earnings per share to drop as much as 13%.
Inflation is leading customers to spend more on food and less on higher-margin merchandise, Walmart said in a filing. That change in consumer spending has forced Walmart to cut prices on items like apparel in order to reduce its inventory. read more
Walmart’s stock tumbled over 9% in extended trade, and other big retailers also sold off. Target (TGT.N) fell over 5% and Amazon (AMZN.O) was down about 4%. Meanwhile Costco Wholesale Corp (COST.O), Best Buy (BBY.N), Dollar General (DG.N) and Dollar Tree (DLTR.O) each declined more than 3%. Home Depot (HD.N) fell almost 2%.