Amazon, Target, Costco Stock Prices Down. blame walmart

Investors in large retail stocks may be nervous for a week or more. Shares of major US retailers were down in pre-market trading this morning. At the time of this writing, Amazon (AMZN) is down 3.5%, Target (TGT) is down 5.3%, and Costco (COST) is down 3.1%. And then there’s Walmart (WMT), which is down 9.4%. Here’s what you need to know:

  • Why is Walmart’s stock price falling? WMT is currently down 9.4% in pre-market trading as it slashed its profit forecast for the year yesterday. Walmart originally said its profit would decline 1% for the full year, but yesterday Walmart revised it to decline between 11% and 13%.
  • Why did Walmart revise their numbers downward? Simply put, people aren’t buying Walmart’s inventory as quickly as the company needs them to. as Reuters notesIn May, Walmart was sitting on $60 billion of inventory that customers weren’t buying. If people aren’t buying existing inventory, Walmart has less room for the inventory customers want to buy. This is driving down sales across the board.
  • But why aren’t customers buying as much from Walmart? If there’s one main factor to call out, it’s inflation. Fuel and food costs are rising this year. When gas and food prices rise, homeowners typically cut back on household goods and clothing (Walmart’s bread and butter). If you can barely keep food on the table, you’re not going to buy that new toaster or fourth pair of jeans you really don’t need.
  • If Walmart Is Struggling, Why Are the Share Prices of Amazon, Target, and Costco Down? Because Walmart is a bellwether for other US retail stocks. If inflation is slowing Walmart’s sales and the backlog of inventory is growing, the Street logically assumes that the same could happen to other retailers, hence the decline in their stock prices. Amazon, for its part, is set to report its second-quarter earnings on Thursday.
  • So what should Walmart do? The company has said that it will reduce prices to move existing inventory. This can mean great sales for customers, but even then, there is no guarantee that people who are already battling inflationary costs will spend more on non-essentials like gas and food. choose to spend.

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