Walmart said it needs another two quarters or so to work through an inventory surge that led to markdowns and contributed to last month's stock decline.
John Furner, chief of Walmart's U.S. operations, said that 20% of the 32% increase in inventories last quarter came from merchandise piling up more quickly than the company wanted. After supply-chain disruptions last year led to more out-of- stock items, another chunk of the increase came from the desired replenishment of goods.
After the retailer's annual employee meeting in Arkansas, Furner told financial analysts that it would take another couple quarters to manage the inventory.
Furner and McMillon faced Wall Street for the first time since Walmart slashed its profit outlook. McMillon said that the retailer is working with suppliers to limit price increases.
The company spent more on storage costs in the first fiscal quarter, so managing inventories is part of that effort.
McMillon is worried about the harm to U.S. households from high inflation rates.
Walmart plans to limit price hikes on basic goods such as canned tuna and macaroni and cheese to make it easier for households to make ends meet.
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