The impact of surging inflation in the U.S., which recently hit a 40-year high, is now being felt in the retail sector. Retail giants like Walmart and Target have reported earnings misses this week and saw their stock plunge.
Walmart reported revenue of $141.57 billion for the first quarter of the year compared to an expected figure of $138.94 billion. However, earnings per share (EPS) was a big miss at $1.30 versus the $1.48 prediction.
The company’s stock (WMT) opened the week by trading for $148.21 on Monday before suffering an 11.4% drop the next day. This was the company’s one-day slide since 1987. The fall continued throughout the week, with WMT trading for $119.07 as of Thursday.
Target also beat the predicted $24.49 billion to record $25.17 billion in revenue but had an even bigger EPS miss. The $2.19 adjusted earnings per share were well below the $3.07 expected. As a result, TGT stock saw a one-day dive of 25 percent. It is currently at a 52-week low of $153.43 per share.
Walmart and Target, as well as most other retailers, have experienced increased costs due to rising prices in labor and fuel. Retail companies also face supply chain issues and sizeable inventories that might take time to clear out.
