Here’s a lesson in why people like Elizabeth Warren and Robert Reich are cranks on inflation and the profitability of corporations.
So Walmart’s stock is tanking today. Last I checked, it was down 9%. If these greedy corporations have been so proficient at gouging their customers, why aren’t investors scrambling to own shares? What an interesting mystery!
Walmart did indeed take in more money over the past quarter. The company beat analysts’ expectations on revenue – bringing in $141.6 billion in revenue versus the anticipated $138.9 billion. This is the sort of thing that makes Warren et al howl. Look at that number going up when Americans’ wages are actually worth less every day!
But the company’s net income DECREASED to $2.05 billion (74 cents a share) from $2.73 billion (97 cents a share) one year ago. The company took in more money, but is on a losing trend overall. What happened to the US economy over the past year that would cause a bread-and-butter company like Walmart to be less profitable? This is the effect of inflation.
Walmart is spending more on literally every aspect of its business. Higher employee costs. Supply chain issues. Higher product costs. It is extremely difficult to remain profitable in an economic environment like this.
I not a huge fan of Walmart for many reasons, but it is hard to say the company is screwing over the little guy. The average Walmart manager now makes $210,000 a year and starting salaries for their truck drivers now range between $95,000 and $110,000 a year. You can get a “working class” job with Walmart and easily earn multiples of what the folks sneering at you and demanding the government assume their student loans are making. Walmart is doing more to help folks keep up with higher prices than higher education institutions selling worthless degrees to anyone who can fog a mirror and take out six figures of debt.
But inflation is not making things easy on them.