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Business News/ Money / World’s richest family loses $13 billion in Walmart rout
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World’s richest family loses $13 billion in Walmart rout

The Walton family fortune fell $12.9 billion on Tuesday after Walmart Inc. slashed its earnings outlook for the second time this year.

Walton family's fortune fell $12.9 billion after Walmart Inc. slashed its earnings outlook (Photo: Bloomberg)Premium
Walton family's fortune fell $12.9 billion after Walmart Inc. slashed its earnings outlook (Photo: Bloomberg)

The Walton family fortune fell $12.9 billion on Tuesday after Walmart Inc. slashed its earnings outlook for the second time this year.

Shares of the Bentonville, Arkansas-based retailer, which is controlled by the family, tumbled as much as 9.1% in New York trading after it said adjusted earnings per share will decline as much as 13% this year with US shoppers reining in spending on big-ticket items amid soaring consumer prices. Two months ago, the company said earnings per share would only dip about 1%, while in February, it had predicted a modest increase.

The family’s late patriarch, Sam Walton, built the business around a discount culture that has in the past helped buoy its stock during recessionary times. In revising its outlook, Walmart cited the cost of reducing merchandise stockpiles that customers were increasingly reluctant to buy as inflation hits a four-decade high.

Walton’s three surviving children, Alice, Jim and Rob, daughter-in-law Christy and Christy’s son, Lukas, own just under half of the retailer. That gives them a combined net worth of about $198 billion, according to the Bloomberg Billionaires Index, down 11% since the first of the year.

Walmart wasn’t the only retailer to see its shares tumble. Canadian e-commerce firm Shopify Inc. fell as much as 17% Tuesday after Chief Executive Officer Tobi Lutke acknowledged the company’s decision to expand rapidly coming out of the Covid-19 pandemic didn’t pay off. As a result, the firm said it planned to cut about 10% of its workforce.

Tuesday’s decline shaved $410 million from Lutke’s net worth, dropping the 41-year-old co-founder’s fortune to about $3 billion, according to the Bloomberg index. Ottawa-based Shopify’s shares have plunged 77% this year.

The Walton family, which owns its Walmart stake through various trusts, has stepped up its stock sales in recent years. They unloaded $6.2 billion in shares last year, which the company has said is part of a strategy to keep the family’s stake under 50% amid buybacks.

Those sales, along with outside investments in US stocks and low-cost exchange-traded funds, has armed them with ample funds for acquisitions. A group led by Rob Walton agreed to buy the NFL’s Denver Broncos for a record $4.65 billion. The deal, announced in June, still needs approval from the National Football League’s finance committee and league ownership.

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This story has been published from a wire agency feed without modifications to the text.

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Published: 26 Jul 2022, 10:36 PM IST
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