Why Is Everyone Talking About Walmart Stock?
The coronavirus pandemic has led to a tragic loss of life worldwide. A lesser secondary consequence has been that it has disrupted supply chains everywhere. Fewer people are willing to work at prevailing wages when a deadly virus is in circulation. Those working sometimes get sent home for over a week during outbreaks of COVID-19 in their workplace.
As a result, the supply of goods and services has decreased. Simultaneously, consumer demand has been resilient as fiscal stimulus has buoyed people's wallets and fueled spending. Walmart (NYSE: WMT) is experiencing both sides of those macroeconomic forces. Spending at stores is increasing, but rising costs are hurting its profit margin. To counter the pressure on margins, Walmart announced on July 5 that it would impose a collect pickup charge on its network of suppliers. Let's consider what that could mean for investors.
The surcharge comes after Walmart lowered its full-year profit outlook in its quarterly update on May 17. Previously, the company had forecast earnings per share for its fiscal 2023 would increase by mid-single digits. Walmart lowered that guidance to say earnings per share would decrease by roughly 1% in fiscal 2023. The significant turnaround was a result of the speed of rising inflation.
Source Fool.com
