The downward profit review of the Walmart (WMT) reinforces the “perverse effects of inflation, which erodes purchasing power and forces spending to be prioritized”. That’s what Alexsandro Nishimura, economist and head of content at BRgives XPstating that this effect is already present in Brazilian retailers.
“There is already a clear distinction in the perspectives according to the direction of the business”, reiterates Nishimura.
Walmart announced, on Monday (15), a cut in its quarterly and annual profit forecast, with a drop of 11% to 13% in profit in 12 months. The North American retailer recognizes that the inflation changed the spending profile of consumers, who went from buying items such as clothes and electronics to buying food.
Inflation in the US jumped from between 0% and 0.25% per year (yy) to 1.5% and 1.75% per year in the first half of 2022.
Excluding divestments, fiscal year earnings per share are expected to decline 10% to 12%, Walmart said.
After the disclosure, the actions of the Brazilian retailers felt the impact of the company’s negative signals.
Via (VIIA3) and Magazine Luiza (MGLU3) closed the day down 6.35% and 6.45%, respectively, and led the biggest lows of the Ibovespa this Tuesday (26). Already American (AMER3) and Carrefour Brasil (CRFB3) fell 4.88% and 1.41%.
But what does that, along with the IPCA (Extended National Consumer Price Index) high, which continues to indicate a burst of the inflation target in 2022, say about the results of Brazilian retailers? Nishimura, from BRA, says that the scenario is not the best, but recalls that inflation in the US and Brazil may be at different times.
The impact of inflation
The inflationary scenario remains under pressure in Brazil. The IPCA for the month of June was 0.67%, 0.20 percentage point (pp) above the month of May. The rate accumulates a high of 5.49% in 2022.
Still under the effect of tax measures to lower fuel and energy prices, the projection for the last Focus Market Bulletin for 2022 inflation is 7.30%, which indicates an overflow of the 2022 target.
in the sector of supermarketsfor example, with demand in free fall, the networks have been working with smaller inventories and sought to balance orders, by ordering only the forecast of what the consumer will actually buy.
According to Robson Munhoz, director of neogrid — which calculates the general index of stockouts (products that are missing from the shelves) —, food retail has been working with the lowest index of stocks in two years.
Despite this and the scare related to Walmart, the BRA economist points out that the projections for the IPCA have been reduced since the beginning of June, when almost 9% was expected for this year.
Nishimura says that the positive highlight of the retail sector is the high-income businesseswhile the e-commerce must do worse.
“Market sentiment for the retail segment is mixed, with a positive outlook for high-income businesses, which should continue to grow, while e-commerce companies should remain under pressure, as physical store sales recover. , but weakening both the online channel and the marketplace”, he explains.
already in food retailthe economist says that the highlight should be the tacklewhich may show growth acceleration due to the resumption of the B2B segment (sales between organizations).
The market also expects good results for the pharmacies“which has some protection against inflationary pressures, due to higher price adjustments, in addition to sales acceleration”.
In June, the retail sales grew 5.9%compared to the same month in 2021, according to the Expanded Cielo Retail Index (ICVA).
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