If the decline in Walmart shares continues, Sam Walton's heirs may have to start shopping at the discount retailer themselves.
Walton family members lost about $19 billion in one day after Walmart (WMT) cut its profit outlook on Tuesday as consumers reined in their spending amid higher inflation levels.
Walmart's stock slumped by 11% after the weak earnings report. Shares of Walmart dipped by 6.23% at 2:20 ET as the broader market sold off.
The Walton family heirs control the retailer whose stock has fallen by 20.98% in the past month.
Jim and Rob Walton, who rank number 16 and 17 on the Bloomberg Billionaires Index, lost $5.63 billion and $5.34 billion of their fortune, respectively at the close of the market on May 17. Jim Walton's net worth is $61.4 billion and he has lost $3.17 billion year-to-date while Rob Walton's net worth is $60.8 billion and his fortune has lost $3.22 billion year-to-date.
The two brothers along with their sister Alice, daughter-in-law Christy and Christy’s son, Lukas, together own nearly half of Walmart and their combined net worth is $212 billion, according to the index.
The Walton family's stake is managed in several trusts and the heirs sold $6.2 billion in shares last year to maintain their holding to under 50% as the company bought back shares.
The billionaire siblings are planning to put their stock sales to work. Rob Walton has been rumored to be a bidder for the Denver Broncos, which is the first National Football League team that is selling itself in four years. The team could go for over $4 billion.
An investment company for the Walton family invests their wealth largely in low-cost exchange-traded funds and owned $5.1 billion in U.S. stocks and ETFs through end of the first quarter.
Walmart Earnings Fall
The retailer reported weaker-than-expected first quarter earnings and slashed its full-year profit forecast as increasing costs impacted its profit margin.
Walmart reported adjusted earnings for the three months ended in December was $1.30 per share, declining 23% from the same period last year and short of Wall Street's consensus forecast of $1.48 per share.
Group revenue generated $141.6 billion, a 2% increase from last year that beat analysts' estimates of $138.88 billion. U.S. same-store sales increased by 3% from last year, the company said, largely in-line with the Refinitiv forecast.
"Bottomline results were unexpected and reflect the unusual environment. U.S. inflation levels, particularly in food and fuel," said CEO Doug McMillon.
With supply chain bottlenecks occurring globally, the retailer increased its inventory levels in anticipation of any major delivery issues. Walmart reported its inventory levels reached 33.4% despite the higher sales figures. McMillon said those higher inventory levels likely need to be "worked through" in the coming quarters with potential discounts on apparel prices.
Walmart estimated fiscal 2023 earnings will fall by about 1%, compared to a prior forecast of a 5% to 6% increase, with net sales increasing by 4%, a 100 basis point boost to its February estimate.
