...like Walmart and Target too
:
The 'good news' about Walmart and Target inventory warnings, according to BofAWalmart (WMT), the world’s biggest retailer, gave a snapshot on Monday of how inflation is pressuring consumers' ability to spend on discretionary items.
But there could be relief ahead as retailers look to move bloated inventories, according to a new note by Bank of America (BofA).
“At one extreme, general merchandise stores are overstocked,” the analysts wrote, “but the good news is that excess inventories could put downward pressure on inflation as big box retailers mark down their prices to entice consumers.”
On Monday, Walmart revised its full-year earnings forecast down to -11% to -13% from -1% previously. The news sent shares more than 7% lower as of the market close on Tuesday.
“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,” Walmart CEO Doug McMillon said in a statement. “We’re now anticipating more pressure on general merchandise in the back half [of the year].”