Walmart’s South Africa Retailer Drops as It Flags Wider Loss

Massmart fell the most in more than a month.

Walmart expects to report a headline loss per share, which excludes certain one-time items, of as much as 450.3 South African cents, compared with a loss of 298.8 cents a year earlier, when it announces full results later this month.

A week of deadly South African riots a year ago was one of the difficulties faced by Walmart's chief executive officer.

Consumer spending is under pressure from rising interest rates, with the central bank hiking aggressively to counter inflation that hit a 13-year high in June The retailer has been slimmed down by Slape. Massmart's Game chain is struggling due to cash strapped shoppers buying less high margin products like fridges and washing machines.

The consumer has not had a decent wage increase, bond costs have gone up, food has gone up, and the petrol price is 50% higher than it was a year ago. Discretionary spend items are affected more by Massmart's product mix. The CEO is trying to fix the game. It couldn't have been worse.

The stock fell as much as 9.9%, the biggest drop since May 19th, and was 3.5% lower by 12:57pm. The decline this year is 42% compared to the 7.6% retreat of the retailers index. Massmart flagged increased finance costs and a one-time lease exit settlement charge during the first half of the year.