...July 26, 2022 NEW YORK (S&P Global Ratings) July 26, 2022--S&P Global Ratings said today that Walmart Inc.'s lower profit outlook for its second quarter and fiscal 2023 remain in line with our expectations for full-year operating performance. The company announced yesterday it expects operating income to decline 10%-12% excluding divestitures and considering other adjustments for the full year; we have been forecasting a similar decline since it posted first quarter results that were weaker than our expectations. We still expect lease-adjusted leverage to remain below the company's downside threshold of exceeding 2x on a sustained basis, and note the 12 month leverage through the first quarter was in the mid-1x area. Still, the speed with which sophisticated large retailers such as Walmart and Target Corp. (earlier in the year) are shifting their outlook is illustrative of the challenges facing the broader U.S. retail sector. Walmart cited more markdowns, particularly in apparel, and noted...
