This has not happened in more than 30 years. Shares in Walmart, the world's largest supermarket chain, have plummeted by more than 11%.
What has happened?
Walmart had surprisingly lowered its corporate forecast, catching analysts on the wrong foot, and all this at a time when inflation is hitting Americans hard.
Walmart shares reacted exceptionally strongly. Walmart cites rising wages and energy costs, as well as surprisingly weak sales in US supermarkets, as the reasons.
There were also positives to report. Walmart generated sales of more than USD 141 billion in this quarter alone, an increase of 2.6%. However, operating profits fell by 23% to USD 5.3 billion. These are figures that many other companies can only dream of.
Walmart is an omnipresent retailer in the US and a good barometer for the state of the American consumer.
While investors and analysts struggle to assess the current state of the market, Walmart is an important barometer used as an indicator to gauge the impact of inflation, higher interest rates, or supply chain problems.
Walmart CEO Doug McMillon said "the discounter's results are unexpected and reflect the unusual environment" as inflation in the US is at its highest level in nearly four decades.
He sees a direct link between the prices of goods in the supermarket and the massive stimulus programmes launched by the US central bank, the Fed, which has pumped massive amounts of money into the market.
Hopefully, the increased labour costs were only caused by the Omicron wave in the winter of 2021, when employees were not available in sufficient numbers and at least temporarily pushed up wages. If energy and commodity prices remain only temporarily at the current high levels they are, that would also take the pressure off Walmart.
As customers are under pressure, they also look for cheaper alternatives and do not always choose the expensive branded items that are lavishly advertised. Inflation, which is higher in the US than it has been in 40 years, has a direct impact on consumer behaviour. Fortunately, Walmart also sells a lot of cheaper own products, which could at least make up for some of the losses.
For the current quarter, either no or only a slight improvement is targeted. It remains to be seen whether the effects such as inflation, wage and energy costs will only exert temporary pressure on Walmart and thus the share or whether this is a phenomenon that will last longer and push the share further down