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Walmart cuts 2023 forecast

STORY: Walmart and Home Depot on Tuesday warned of weaker-than-expected profits for this year, as both retailers cited soaring prices.

Walmart said cautious spending by consumers could pressure profit margins.

CEO Doug McMillon said he expects "stubborn inflation" in dry grocery and items made for immediate consumption to have some "mixed" impact this year.

Higher U.S. consumer prices have added to fears the Federal Reserve might lift borrowing costs further to cool domestic demand... and trigger a recession in the second half of the year.

Home Depot said it sees demand for home improvement goods slowing this year as inflation hurts spending on remodeling projects. The number one U.S. home improvement retailer is also boosting spending on wages by $1 billion to address labor shortages while struggling with higher costs.

Analysts say the move to raise wages for frontline, hourly associates could raise doubts around Home Depot’s profitability.

Home Depot’s shares were down about 5-percent in midday trading on Tuesday, putting them in the red for the year.

Walmart’s stock was trading about flat and is slightly higher for the year.