International

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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International

U.S. Senate Rejects Budget, Bringing Government Closer to Shutdown Amid DHS Dispute

The U.S. Senate voted on Thursday against a budget proposal in a move aimed at pressuring changes at the Department of Homeland Security (DHS), following the killing of two civilians during a deployment of immigration agents in Minneapolis.

All Senate Democrats and seven Republican lawmakers voted against the bill, which requires 60 votes to advance, pushing the country closer to a partial government shutdown that would cut funding for several agencies, including the Pentagon and the Department of Health.

The rejection came as Senate leaders and the White House continue negotiations on a separate funding package for DHS that would allow reforms to the agency. Proposed measures include banning Immigration and Customs Enforcement (ICE) agents from wearing face coverings and requiring them to use body-worn cameras during operations.

The vote took place just hours after President Donald Trump said he was “close” to reaching an agreement with Democrats and did not believe the federal government would face another shutdown, following last year’s record stoppage.

“I don’t think the Democrats want a shutdown either, so we’ll work in a bipartisan way to avoid it. Hopefully, there will be no government shutdown. We’re working on that right now,” Trump said during a Cabinet meeting at the White House.

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International

Trump Says Putin Agreed to One-Week Halt in Attacks on Ukraine Amid Extreme Cold

U.S. President Donald Trump said on Thursday that he secured a commitment from Russian President Vladimir Putinto halt attacks against Ukraine for one week, citing extreme weather conditions affecting the region.

“Because of the extreme cold (…) I personally asked Putin not to attack Kyiv or other cities and towns for a week. And he agreed. He was very pleasant,” Trump said during a Cabinet meeting broadcast by the White House.

Trump acknowledged that several advisers had questioned the decision to make the call.
“A lot of people told me not to waste the call because they wouldn’t agree. And he accepted. And we’re very happy they did, because they don’t need missiles hitting their towns and cities,” the president said.

According to Trump, Ukrainian authorities reacted with surprise to the announcement but welcomed the possibility of a temporary ceasefire.
“It’s extraordinarily cold, record cold (…) They say they’ve never experienced cold like this,” he added.

Ukrainian President Volodymyr Zelensky later commented on the announcement, expressing hope that the agreement would be honored.

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International

Storm Kristin Kills Five in Portugal, Leaves Nearly 500,000 Without Power

Storm Kristin, which battered Portugal with heavy rain and strong winds early Wednesday, has left at least five people dead, while nearly half a million residents remained without electricity as of Thursday, according to updated figures from authorities.

The revised death toll was confirmed to AFP by a spokesperson for the National Emergency and Civil Protection Authority (ANPEC). On Wednesday, the agency had reported four fatalities.

Meanwhile, E-Redes, the country’s electricity distribution network operator, said that around 450,000 customers were still without power, particularly in central Portugal.

Emergency services responded to approximately 1,500 incidents between midnight and 8:00 a.m. local time on Wednesday, as the storm caused widespread disruptions.

The Portuguese government described Kristin as an “extreme weather event” that inflicted significant damage across several regions of the country. At the height of the storm, as many as 850,000 households and institutions lost electricity during the early hours of Wednesday.

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Several municipalities ordered the closure of schools, many of which remained shut on Thursday due to ongoing adverse conditions.

Ricardo Costa, regional deputy commander of the Leiria Fire Brigade, said residents continue to seek assistance as rainfall persists.
“Even though the rain is not extremely intense, it is causing extensive damage to homes,” he noted.

In Figueira da Foz, a coastal city in central Portugal, strong winds toppled a giant Ferris wheel, underscoring the severity of the storm.