The world’s richest family just lost $19 billion in just one day
The fortune of the Walton family, the world’s richest family, has dropped sharply, after Walmart Group cut its profit forecast for the year due to high labor and fuel costs, according to Bloomberg. Earnings per share for fiscal 2023 will accordingly fall about 1% from the previous forecast of average single-digit growth.
Shares of Walmart, now controlled by the Walton family, fell nearly 12% in trading on May 18
Specifically, shares of Walmart, now controlled by the Walton family, fell nearly 12% in today’s trading session, after the company announced first-quarter profit that fell short of expectations. Soaring inflation put pressure on the retail giant’s profit margins, challenging the group’s need to raise prices for its products.
Walmart founder, Mr. Sam Walton, oriented the group to follow the strategy of low-cost sales. This helps Walmart stock, despite going through many general downturns of the economy, still growing sustainably. The three children of Sam Walton, Alice, Jim and Rob, daughter-in-law Christy and grandson Lukas own less than 50% of the corporation but have a combined net worth of $212 billion, according to the Bloomberg Billionaires Index.
According to Bloomberg, the Walton family owns shares through various funds. In the last few years, they have accelerated selling shares as part of a strategy to keep their holdings below 50%. In 2021, a total of $6.2 billion worth of shares were sold by the family.
The sale of shares helped the Waltons build a large fortune outside of Walmart. As of the end of the first quarter, an investment company owned by the Walton family held $5.1 billion in stock, mostly in low-cost ETFs.
This makes it easy for the world’s wealthiest family to make acquisitions. In it, Rob Walton is said to be in talks to buy American football club Denver Broncos for $4 billion.
Rob Walton is said to be in talks to buy American football club Denver Broncos for $4 billion
According to IBES data from Refinitiv, Walmart’s total first-quarter revenue increased 2.4% to $141.57 billion. Placer.ai data also shows that customer numbers to Walmart have grown an average of 4.9% since the start of 2022 compared with the same period in 2021, thanks to its ability to curb price gains and attract a wider audience. Shoppers care about price. They are mainly low-income households, having to buy cheap things to feed their families, such as bread, milk or canned tuna.
“Shopping is not just about convenience anymore, as people are paying more for fuel,” said Walmart CEO Doug McMillon.
However, in a recent report, Mr. Doug McMillon said that rising inflation, especially in food and fuel prices, has put great pressure on profit margins and operating costs. CNBC quoted Chief Financial Officer Brett Biggs as saying that high labor costs and huge inventories put Walmart under great pressure. Unusually cool weather conditions in the US make certain items, such as swimming pool cleaners, difficult to sell.
Grocery products, Walmart’s big category, were among the hardest-hit items amid a 9.4% increase in food costs in April, according to CNBC, according to unadjusted data from CNBC. BLS.
It is known that Walmart has won a lot of market share in the grocery sector, but everything has two sides. A focus on food means the retailer will have to sell more low-margin items like eggs and bread instead of higher-margin items like clothing or electronics.
Walmart’s online commerce revenue growth year over year
Currently, Walmart shares are trading at $131.35, down nearly 12% from the previous session. This is one of the retail groups that are particularly interested by experts and investors to study how American consumers weather inflation. Walmart’s market capitalization currently stands at nearly $408 billion, according to CNBC.
According to: Bloomberg, CNBC
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