A cautious outlook from the largest retailer in the U.S. has sent a number of stocks in the consumer sector lower on Tuesday.
Walmart ( WMT ) did not pull any punches in warning that shoppers are pulling back due to higher prices and the Bentonville-based retail giant sees slower sales and profit growth this year against the tough macroeconomic backdrop.
"The consumer is still very pressured," stated Walmart CFO John Rainey in a media appearance. "And if you look at economic indicators, balance sheets are running thinner and savings rates are declining relative to previous periods. And so that’s why we take a pretty cautious outlook on the rest of the year," he added.
Mall and e-commerce sector decliners included ThredUp ( TDUP ) -7.49% , Stitch Fix ( SFIX ) -6.99% , Chewy ( CHWY ) -6.23% , Children's Place ( PLCE ) -5.50% , Abercrombie & Fitch ( ANF ) -4.70% , Rent the Runway ( RENT ) -4.55% , Lulu's Fashion Lounge ( LVLU ) -4.55% , Boot Barn ( BOOT ) -3.70% , and Foot Locker ( FL ) -3.05% .
Leisure stock decliners included Peloton Interactive ( PTON ) -4.85% , Six Flags Entertainment ( SIX ) -3.90% , and Penn Entertainment ( PENN ) -3.55% .
Specialty retailers Container Store ( TCS ) -9.07% , Bed Bath & Beyond ( BBBY ) -8.44% , Big Lots ( BIG ) -4.85% , Bath & Body Works ( BBWI ) -4.29% , RH( RH ) -3.86% , Best Buy ( BBY ) -3.42% also took the Walmart update hard.
Kroger ( KR ) was an outlier on Tuesday with a 0.95% gain. Walmart's ( WMT ) positive update on grocery store spending and margins may have helped sway sentiment. For its part, Walmart ( WMT ) also turned around a premarket loss to show a 0.85% gain at 11:22 a.m. after execs tipped during the earnings call that the retailer expects operating income growth to outpace sales growth.
Dig into the details of the Walmart earnings report and guidance update.
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Consumer stocks fall after Walmart warns shoppers are pulling back on spending