Walmart says it will take at least six months to reduce excess inventory

Walmart said that due to multiple supply chain disruptions and insufficient inventory of some products, the accumulation of goods in the first quarter was faster than expected. Walmart said it would take at least six months to reduce excess inventory. The retail giant also said that it would take about two more quarters to overcome the gap that led to the downgrade and recover the sharp drop in stock prices last month.

John Furner, head of Walmart's U.S. business, said that about one-fifth of the 32% increase in inventory last quarter was due to the faster-than-expected stockpiling of goods. The rest of the excess inventory was caused by a surge in out-of-stock goods after supply chain disruptions, which led to a restocking boom. Furner predicted that it might take several quarters to reduce inventory levels.

The news caused Walmart's stock price to record its biggest single-day drop since 1987, with its market value evaporating by about $34 billion in less than three days.

Walmart's warehousing costs in the first quarter exceeded expectations. Walmart is currently working to cut expenses while working with suppliers to limit price increases and lowered its profit outlook on May 17.

It is learned that Walmart CEO McMillon is worried that high prices caused by high inflation rates may hit the consumption demand of American families. In order to stabilize demand and enhance competitiveness, Walmart plans to limit the price increases of staple foods such as canned tuna, macaroni and cheese.

Editor ✎Estella/

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