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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

Food prices send hunger soaring in Latin America: UN agencies

Photo: AP News

| By AFP |

Rising food prices in Latin America and the Caribbean caused the number of people going hungry in the region to rise by more than 13 million between 2019 and 2021, a United Nations report said Tuesday.

The report by three UN agencies said the region was particularly vulnerable to the global food crisis caused by Russia’s war in Ukraine due to a high reliance on wheat, maize and fertilizer imports.

“The number of people in the region suffering from hunger increased by 13.2 million to 56.5 million,” read the report, released at a press conference in Santiago, Chile.

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In addition, moderate or severe food insecurity affected 267.7 million people — 40.6 percent of the region’s population — in 2021. 

This is “far above the world average” of 29.3 percent, said the report.

“The rise in food inflation and extreme poverty is one of the factors behind the increase in food insecurity and hunger,” said the report by the Economic Commission for Latin America and the Caribbean (ECLAC), the Food and Agriculture Organization (FAO) and the World Food Programme (WFP).

According to the FAO, food insecurity refers to a lack of regular access to healthy and nutritious food.

“The heavy reliance on imported fertilizers, and fluctuating food prices, have an unavoidable negative impact on livelihoods — mainly of the rural population — and access to healthy food,” said Mario Lubetkin, FAO Assistant Director-General.

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International

Colombia landslide kills 34

Photo: AFP

| By AFP |

Heavy rains in northwest Colombia sent a wall of earth crashing onto a winding road, swallowing up a bus and other vehicles and killing 34 people, emergency services said Monday.

The landslide Sunday evening prompted a large rescue effort, with dozens of people in hard hats using backhoes and excavators to dig through the earth looking for victims.

The National Unit for Disaster Risk Management said the fatalities included eight minors and that nine other people were injured in the disaster in the remote town of Pueblo Rico.

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The bus had set out from the city of Cali with 25 passengers, and traveled 270 kilometers (170 miles) before being hit by the landslide as it passed through the Andes mountain region, civil defense officials said.

Colombian media reported that a child had survived and was pulled from the arms of its mother, who did not make it.

One survivor said the bus driver had at first managed to dodge the worst of the landslide.

“Part of it was coming down and the bus was a little bit back from that. The bus driver was backing up when it all came crashing down,” Andres Ibarguen told radio station Lloro Stereo.

The rainy season that began in August is Colombia’s worst in 40 years, according to the government, causing accidents that have left more than 270 people dead.

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The country has declared a national disaster over the rains linked to the exceptionally long La Nina weather phenomenon, which cools surface temperatures and is currently causing drought and flooding around the globe.

Today, the landslide “puts this town in mourning, tomorrow it could be in another area, because we really have many unstable areas in the country, and the rainy season has not ended,” said Javier Pava of the UNGRD.

The UN’s World Meteorological Organization said last week the La Nina conditions could last until February or March 2023.

In Colombia, the phenomenon has also caused crop damage, compromising food supplies and leading to soaring prices.

In July, three children were killed in northwestern Colombia when a landslide buried a rural school. In February, 14 people died in a mudslide triggered by heavy rains in central-western Risaralda province.

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International

At least 27 killed in Colombia landslide: president

Photo: AFP

| By AFP |

At least 27 people were killed when a landslide engulfed a road in northwest Colombia, trapping people in a bus and other vehicles, said President Gustavo Petro on Monday.

“It is with sadness that I must announce that, so far, 27 people, including three minors, have lost their lives in the tragedy” that struck on Sunday in a remote area of the Pueblo Rico municipality, Petro wrote on Twitter.

On Sunday evening, the president reported three dead, as dozens of rescue workers searched for survivors.

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One survivor said the driver of the bus managed to dodge the worst of the landslide.

“Part of it was coming down and the bus was a little bit back from that. The bus driver was backing up when it all came crashing down,” Andres Ibarguen told radio station Lloro Stereo.

The bus had set out from the city of Cali with 25 passengers, civil defense officials said.

The rainy season that began in August is Colombia’s worst in 40 years, according to the government, causing accidents that have left more than 270 people dead.

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