Walmart He said Wednesday that inflation will continue to pressure his business this year and that he will slow his hiring pace as he develops automation technology amid a tight job market.
“We believe that, over time, the number of associates will grow, but at a slower rate than in the past, as we complement the growth of people with technology and automation,” Chief Financial Officer John David Rainey said at the Investor meeting in Tampa, Florida.
Rainey’s remarks come after the retailer said Tuesday that it expects around 65% of its stores to be automated within three years. The company does not anticipate layoffs in the short term, apart from those it has already announced.
Reuters reported last month that the company was laying off hundreds of workers at at least five facilities that order through Walmart.
The company, which has more than 5,000 stores in the United Statesalso maintained its sales and profit forecasts for the April quarter and for the full year.
Asked at the meeting about the rate of inflation Walmart assumes in its forecasts, he said he expects this year “to be a little unusual” as the company is still feeling the effects of rising prices. However, he expects inflation to drop to 3% by the end of the year.
“While some investors were expecting an increase (in the forecasts), we view the reiteration as favorable and could leave some room for upside with a month (of the quarter) remaining,” said Michael Baker, an analyst at DA Davidson.
More than 56% of Walmart’s sales come from groceries, where inflation has been highest. According to the Department of Labor, food prices in the United States rose 9.5% in February compared to the same period last year.
Executives say Americans continue to prefer private labels to national brands, a shift that has helped Walmart’s own-brand business account for more than 20% of its total sales, which exceed $600 billion.
Walmart shares were up 2% in morning trading.
