Walmart Inc (NYSE:WMT) stock fell 1.87% (As on February 22, 11:22:10 AM UTC-4, Source: Google Finance) after the company gave a cautious note in its economic outlook for 2023 as the company forecast full-year earnings below estimates and warned that tight spending by consumers could pressure profit margins. Higher U.S. consumer prices and loftier costs for rental housing and food have raised fears among executives that the U.S. Federal Reserve could further lift borrowing costs to cool domestic demand, leading to an economic downturn in the second half of the year. Inflation-squeezed consumers are increasingly shifting toward buying more food and consumables from general merchandise, which Rainey said will continue to be a drag on margins this year. Toys, electronics, home and apparel remain soft spots.

Moreover, Walmart U.S. comp sales grew 8.3% and 13.9% on a twoyear stack. eCommerce growth was 17% and 18% on a two-year stack. Continued to gain market share in grocery. Sam’s Club comp sales1 increased 12.2%, and 22.6% on a two-year stack. Membership income increased 7.1% with member count at an all-time high. Walmart International net sales were $27.6 billion, an increase of 2.1% and negatively affected by $0.9 billion from currency fluctuations, while constant currency sales were $28.5 billion, an increase of 5.5%. Walmex, China, and Canada led the way. Global advertising business grew over 20%, led by 41% growth at Walmart Connect in the U.S. Consolidated gross profit rate declined 83 basis points, primarily due to markdowns and mix of sales

WMT in the fourth quarter of FY 22 has reported the adjusted earnings per share of $1.71, beating the analysts’ estimates for the adjusted earnings per share of $1.51. The company had reported the adjusted revenue growth of 7.3 percent to $164.05 billion in the fourth quarter of FY 22, beating the analysts’ estimates for revenue of $159.76 million. Adjusted operating income was $6.4 billion, an increase of 6.9%.

Walmart forecast earnings of $5.90 to $6.05 per share for the year through January 2024, below analysts’ estimates of $6.50 per share, according to Refinitiv IBES data, as the company continues to battle price hikes from many of its product suppliers. The forecast includes a 14-cent estimated impact from an accounting charge related to moderating inflation in key merchandise categories and reduced inventory levels at its Walmart U.S. and Sam’s Club business

The company also raised its annual cash dividend by about 2% to $2.28 per share for fiscal 2024.