Retailers Walmart and Kroger struggle with slowing comparable sales and rising costs, prompting concerns over valuation and the impact of reduced consumer basket sizes.
Kroger cut its full-year identical sales growth guidance and missed analyst estimates, with identical sales growth dropping from 3.4% to 0.2% year-over-year.
Walmart's comparable sales growth was the slowest in nearly five years and missed estimates, while management cited a $10 billion cost headwind from higher fuel prices.
Walmart and Kroger report cooling sales growth as inflationary pressures weigh on consumer discretionary spending. Both retail giants missed analyst estimates, with Kroger cutting its full-year guidance and Walmart facing a projected $10 billion cost headwind from fuel prices.
Weakness in sales is attributed to an inflationary environment where consumers are reducing discretionary spending and overall basket sizes despite maintaining store visit frequency.