On Tuesday, the Walton family fortune fell $11.4 billion after Walmart Inc. cut its earnings forecast for the second time this year.
Shares of the Bentonville, Arkansas-based retailer, which is controlled by the family, fell 7.6 per cent in New York trading after the company said adjusted earnings per share will fall by up to 13 per cent this year as US consumers cut back on big-ticket purchases amid rising consumer prices.
Two months ago, the company predicted that earnings per share would only fall by about 1%, while in February, it predicted a slight increase. Sam Walton, the family’s late patriarch, built the business around a discount culture, which has historically helped to buoy its stock during recessionary times.
Walmart revised its outlook due to the cost of reducing merchandise stockpiles that customers were becoming increasingly hesitant to buy as inflation reached a four-decade high.
Walton’s three surviving children, Alice, Jim, and Rob, as well as daughter-in-law Christy and Christy’s son, Lukas, own slightly less than half of the company.
According to the Bloomberg Billionaires Index, this gives them a combined net worth of about $199.3 billion, a drop of nearly 11% since the beginning of the year.
Walmart was not the only retailer whose stock fell. Shopify Inc., a Canadian e-commerce company, fell 14% on Tuesday after Chief Executive Officer Tobi Lutke admitted the company’s decision to rapidly expand following the Covid-19 pandemic did not pay off. As a result, the company announced plans to cut about 10% of its workforce.
The decline on Tuesday reduced Lutke’s net worth by $383 million, bringing the 41-year-old co-fortune founder to around $3.1 billion, according to the Bloomberg index. The stock of Ottawa-based Shopify has dropped 77% this year.
The Walton family, which owns a stake in Walmart through various trusts, has increased its stock sales in recent years. They unloaded $6.2 billion in shares last year as part of a strategy to keep the family’s stake under 50% amid buybacks, according to the company.