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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.

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

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.

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“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.

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.

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“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.

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.

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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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International

A court orders the arrest of the Ukrainian Minister of Agriculture accused of corruption

The Supreme Anti-Corruption Court of Ukraine issued a preventive arrest warrant on Friday against the Minister of Agriculture, Mikola Solski, accused of being part of a plot that would have illegally appropriated about 2,500 hectares of land that belonged to the State before his arrival at the Ministry.

According to Ukrainian media, the court has issued a sixty-day arrest warrant, which Solski can avoid if he pays a bail of 75.7 million gryvnas (1.78 million euros at the current exchange rate).

Solski presented his resignation on Thursday – which must now be accepted by the Ukrainian Parliament – after being accused this week by the Anti-Corruption Office of Ukraine (NABU) of participating in a transfer of publicly owned land valued at 291 million gryvnas (about 7 million euros).

In addition, the organization investigates the still minister for trying to transfer another lot of land in an equally criminal way, valued at 190 million gryvnas (4.5 million euros).

The events occurred, according to the Anti-Corruption Office, between 2017 and 2021.

From 2019 to 2021, Solski was president of the Committee on Agriculture and Land Policy of the Ukrainian Parliament and in 2022 he was appointed minister.

Ukrainian President Volodymyr Zelensky has marked himself as one of his priorities to combat corruption at the highest level in time of war to modernize the country and meet the requirements for access to the European Union.

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International

The Chinese president tells the United States that he has to be “faithful” to his word to solve the “problems to be solved”

Chinese President Xi Jinping has told the US Secretary of State Antony Blinken that the United States must “be faithful to its word” in order to solve the “problems still to be solved” in the bilateral relationship.

“China and the United States have gone through ups and downs but we must respect each other, cooperate and coexist. We must be partners and not harm each other, and for that we have to look for common ground, be faithful to the words and determined with the facts,” Xi said during the meeting.

According to a statement from the Chinese Foreign Ministry, Xi also warned that “you can’t say one thing and then do another,” after which he acknowledged that, “despite the consensus and progress made” in recent months there are still “many problems to solve and room to make an effort.”

“This year we celebrate the 45th anniversary of the establishment of diplomatic relations. The important thing we have learned in this time is that we must be partners, not rivals. That we must achieve a mutual benefit instead of harming each other. The important thing is to look for the common points and put aside the differences,” Xi said during the meeting.

The Chinese president received Blinken this Friday in Beijing for an interview that was not part of the agenda of the official visit made to China by the American diplomat.

This is the second time Xi has received Blinken in Beijing, given that the Chinese president already met the American on his last visit to the Chinese capital in June 2023.

Before his meeting with Xi, Blinken also met today in Beijing with his Chinese counterpart, Wang Yi, who warned him of “growing problems” in bilateral relations, after the U.S. Senate approved a bill that will force the Chinese company ByteDance to sell the popular TikTok video application if he does not want the platform to be banned in the United States.

ByteDance, the parent company of the platform, has made it clear today that it has no intention of selling the application despite US legislation.

Earlier this week, TikTok – which, like Western services such as Google, Facebook, X or Instagram, is blocked in China, where ByteDance operates a similar application called Douyin – already anticipated that it would challenge the new US law, which it considers “unconstitutional” in court.

U.S. legislators justify their decision by arguing that the platform poses a threat to the national security of the United States due to the possibility that the Chinese government will access user data.

In March, China criticized the “repression” against the application by the United States for being “an intimidating tactic” that will eventually “turn against” the North American country.

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International

Israeli bombings in the north and south of Gaza cause fifty deaths

The latest Israeli attacks and bombings along the Gaza Strip have caused the death of at least 51 people, most of them civilians, both in Gaza City (north) and in the southern area of Rafah.

Israeli fighter planes bombed a house belonging to the Al Shawa family last night, in the Al Rimal neighborhood, in Gaza City, where rescue teams recovered the lifeless bodies of three people, including those of a child and a woman, under the rubble.

As Palestinian sources reported to the WAFA news agency today, the victims and several injuries were transferred to the Al Ahli Arab Hospital, the last hospital in operation in Gaza City after the Israeli military siege left the Al Shifa inoperative in March.

Other bombings in the neighborhoods of Zaytun, south of Gaza City, and against a residential building in the center of the city, caused the death of another Gazan, as well as an indeterminate number of injuries.

In Rafah, one fisherman died and another was injured, according to Palestinian medical sources, while in the center of the enclave several Gazans were injured in attacks against the refugee camps of Nuseirat and Bureij.

According to the latest figures provided on Thursday by the Ministry of Health of the Government of Hamas, more than 34,300 Palestinians have already died in Gaza, 75% women and children.

One of those little ones is a Gaza baby rescued from her mother’s womb, who died in an Israeli airstrike perpetrated in Rafah last weekend.

After five days of struggle to stay alive, he has finally died, as confirmed this Friday by a family member.

Over the weekend, 16 other children were killed in Rafah, where Israel is expected to start a ground offensive.

A member of the Hamas political bureau asked the 18 signatory countries yesterday on Friday of a joint statement demanding the Islamists the “immediate” release of the 133 hostages, to also pressure Israel to accept a truce in the Gaza Strip.

Your sons and daughters are no more valuable than our sons and daughters,” the head of political and international relations of the political bureau of Hamas, Basem Naim, to which EFE had access, said today in a message.

Today, a delegation of the Egyptian Intelligence service is scheduled to arrive in Israel, in an attempt to revive the stagnant truce negotiations mediated by Cairo, Qatar and the United States, Egyptian security sources told EFE last night.

From Geneva, UN rapporteurs demanded that Israel allow the arrival in Gaza of the Freedom Flotilla that it plans to sail this Friday from Istanbul with 5,500 tons of humanitarian aid.

Diplomats have warned that the safe transit guarantee of this initiative is part of Israeli international obligations to prevent genocide in Palestinian territory.

“Israel must comply with international law, including the recent orders of the International Court of Justice, to ensure the unhindered arrival of humanitarian aid,” they said in a statement.

Israel warned on Friday that any arrival of aid to Gaza other than by air, land border crossings or the port of Ashdod will constitute a “provocation,” after being asked by EFE about the administrative blockade that the Freedom Flotilla – a civilian initiative organized by human rights activists – says it is suffering in Istanbul.

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