New York: Walmart reported better-than-expected quarterly profits Thursday as strong consumer demand during the festive season offset the hit from higher costs. The giant retailer pointed to some $400 million in higher-than-expected supply chain costs at its namesake US division, plus an additional $400 million hit due to employee absences during the Omicron variant of Covid-19.
But these effects were countered by “strong underlying trends”; at Walmart US, “aided by robust consumer spending and a strong holiday,”; Walmart said in an investor presentation. The company highlighted apparel and automotive goods as items with especially strong demand during the period. Profits in the quarter were $3.6 billion, compared with a loss of $2.1 billion in the year-ago period as revenues climbed 0.5 percent to $152.9 billion.
The retail industry, like other sectors, is being forced to navigate a challenging inflationary environment due to higher expenses for materials, shipping and labor. Walmart has said it has taken a careful approach to raising prices that seeks to spread out the hit across consumer “baskets”; so that the company doesn’t lose customers to other chains.The company said its gross profit rate rose during the quarter.Shares rose 2.3 percent to $136.55 in pre-market trading. US strong holiday demand, supply chain costs over $400 mn higher than expected at beginning of quarter.
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