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.
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.
“There’s still a lot of trepidation and uncertainty with the economic outlook. Balance sheets are continuing to get thinner, savings rate is roughly half of what it was at a pre-pandemic level and we’ve not been in a situation like this where the Fed is raising at the rate that it does,” Chief Financial Officer John David Rainey told Reuters.
“So, that makes us cautious on the economic outlook because we simply don’t know what we don’t know.”
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