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Walmart lifts outlook on strong earnings but hit by opioid settlement

Photo: Robyn Beck / AFP

| By AFP | Juliette Michel with Beiyi Seow in Washington |

US retailer Walmart saw its earnings top expectations in the third quarter as consumers looked for bargains amid surging inflation, but its numbers were bogged down after a settlement announced Tuesday relating to opioid cases.

The big-box retailer said it “continued to gain market share” in the grocery segment, raising its full-year outlook on strong results despite a challenging environment this year.

Total revenue came in better than expected at $152.8 billion, up 8.7 percent from a year ago.

Walmart also expects that its full-year adjusted profit will decline between 6.5 percent and 7.5 percent — an improvement from earlier estimates.

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But its numbers were bogged down by a settlement resolving allegations that it contributed to the opioid crisis by failing to regulate prescriptions at stores.

The deal is set to provide $3.1 billion to communities nationwide and “require significant improvements in how Walmart’s pharmacies handle opioids,” according to a statement by New York Attorney General Letitia James’s office.

This came as the opioid crisis in the United States — causing more than 500,000 deaths over 20 years — triggered a flurry of lawsuits against drugmakers, distributors and pharmacies.

US pharmacy chains CVS Health and Walgreens similarly announced preliminary agreements this month to pay a total of more than $10 billion to resolve opioid claims.

“Pharmacies such as Walmart played an undeniable role” in perpetuating the harm caused by opioids, said James, adding that the settlement is being sent to other states for review and approval.

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In a separate statement, Walmart said it “strongly disputes” the allegations but believes the settlement will help communities in the fight against the crisis.

Gains in grocery

“With the cost of everyday items still stubbornly high in too many categories, more customers and members are choosing us for the value and assortment we’re known for,” Walmart Chief Executive Doug McMillon told an earnings call.

Customers are shopping with Walmart more often as well, including wealthier consumers, he said.

“Walmart US continued to gain market share in grocery, helped by unit growth in our food business,” McMillon said in a statement, adding that the company has improved its inventory position.

“When consumer finances get tough, Walmart gets going. That is the central message from today’s strong set of numbers,” said GlobalData managing director Neil Saunders in an analysis.

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He noted that most of the company’s expansion is occurring in grocery where shoppers are feeling the pinch.

Although some of this is down to inflation, “there has also been volume growth which reflects the increase in customer numbers.”

With US inflation hovering near a decades-high level, consumers have been spending more on staples and pulling back on discretionary items, forcing Walmart to cut its profit outlook in July.

The company also announced in recent months that it would hire 40,000 workers for the upcoming holiday season, significantly lower than before.

Investors have been eyeing Walmart’s results as a proxy for demand, and Wall Street stocks climbed in morning trading on signs of resilience among consumers.

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Pope Francis meets former Gaza hostages

Pope Francis met on Thursday at the Vatican with 16 Israelis who had been held hostage in Gaza for months by the Islamist group Hamas, according to the official Vatican news website.

The group consisted of ten women, four men, and two children, as reported by the same source. Several of the former hostages showed the Argentine pontiff banners or photos of their loved ones who remain in captivity.

Francis had previously met with the families of hostages in April this year and November 2023, but this was the first time he had met with individuals who had personally endured captivity.

Since the conflict between Israel and Hamas began, the pope has repeatedly called for the immediate release of Israeli hostages, while also condemning the suffering of the Palestinian population.

The war erupted on October 7, 2023, when Islamist militants attacked southern Israel, killing 1,206 people, mostly civilians, and kidnapping 251, according to an AFP tally based on official Israeli figures that include hostages who died in captivity.

Of the kidnapped, 97 are still being held in Gaza, but the Israeli military estimates that 34 of them have died.

The military offensive launched by Israel in response has killed at least 43,736 people in the Gaza Strip, mostly civilians, according to data from the Ministry of Health in the Hamas-governed territory.

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Israeli airstrikes on Damascus kill 15 and injure 16, including women and children

Israeli forces carried out airstrikes on residential buildings in the Syrian capital, Damascus, and its surroundings on Thursday, resulting in at least 15 deaths and 16 injuries, according to Syria’s Ministry of Defense and state television.

The ministry stated that around 3:20 p.m. local time (12:20 GMT), the Israeli military launched an aerial attack from the direction of the occupied Golan Heights, targeting several residential buildings in the Mazzeh neighborhood in western Damascus and the Qudsaya suburb to the northwest of the capital.

The airstrikes “resulted in the death of 15 people and injuries to 16 others, including women and children,” based on initial estimates, in addition to significant damage to private property and civilian buildings, the ministry added.

Meanwhile, state television reported Israeli airstrikes on three buildings in Mazzeh and another on a building in an educational complex located in a residential area of Qudsaya.

Following the strikes, loud explosions were heard throughout the city, and thick plumes of smoke could be seen rising from the targeted locations. Ambulances and emergency services rushed to the scene to attend to the victims.

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Drug trafficker dies after boat collision with Guardia Civil Vessel in Sanlúca

Three people were on the boat that collided with a Guardia Civil vessel around midnight at the mouth of the Guadalquivir River in Sanlúcar de Barrameda, near the Andalusian city of Cádiz, a spokesperson for the Civil Guard reported.

Two officers sustained “contusions,” the spokesperson explained.

The drug traffickers managed to bring the boat to shore, where one of them was “abandoned” severely injured. The other two fled.

The Civil Guard officers attempted to resuscitate the victim before transporting him to Sanlúcar de Barrameda, but he ultimately died early in the morning.

The other two suspects took advantage of the officers’ absence while they were taking the victim and returned to set their boat on fire.

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The suspects’ boat traveled “400 meters” before crashing head-on and “at full speed” into the riverbank, where a hundred bundles of hashish were found.

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