Walmart stock plunges as soaring gas prices hit profits and slam shoppers wallets

Walmart‘s stock plunged on Thursday after the retail giant revealed a disappointing full-year forecast, as high gas prices eat into shoppers’ wallets.The Bentonville, Ark-based big box retailer said it expects adjusted earnings per share of $2.75 to $2.85, and a net sales jump between 3.5% and 4.5% for the year.After the guidance disappointed investors last year when it was initially released, analysts had estimated Walmart would hike its adjusted earnings forecast to $2.91 a share.It’s just the third time in the past 16 quarters that Walmart did not beat its earnings expectations – sending shares in the retailer down 7.7% in early trades on Thursday.For the current quarter, Walmart said it expects adjusted earnings per share of 72 cents to 74 cents, also missing expectations of 75 cents, and a net sales increase of 4% to 5%.Walmart CFO John David Rainey told CNBC that consumers might feel more strain in the second quarter as cushioning from higher tax returns wears off.“I think higher tax returns muted some of the pressure related to higher fuel prices and as we’re in a period of time right now where those tax refunds are largely not coming in, I think consumers are going to feel more of that pressure from higher fuel prices,” Rainey said. Major retailers have been staring down a difficult economic mix, as fears around the Iran war and tariffs have sent consumer sentiment plunging to fresh record lows. The war’s severe energy supply disruption has pushed national average gasoline prices to $4.56 a gallon, according to AAA – a more than 50% premium over pre-war costs.Americans are also dealing with years of sticky inflation, high interest rates and housing shortages – all of which have made it more difficult for retailers to win back their wallets.Budget retailers and fast-food chains have nodded to a so-called K-shaped economy, meaning they have noticed a split among customers. Higher-income consumers have been benefitting from stock market ...