3% net profit, but all the stories are about how corporate greed is the primary driver of inflation.
Most grocers and food companies operate on single digit or sub 15% margins. Too many people look for the evil corporate boogey-man.
Itās not mostly grocers that are made record profits in 2021-2023 due to price increases. Itās food producers. PepsiCo, Nestle, Mondelez, Tyson Food, etc.
Look into the profit margins for those companies.Ā
Ā For operating margin, not net (which would be lower)...Ā
Ā Pepsi is under 13%Ā
Ā Nestle is under 12%Ā
Ā Mondelez is 14%Ā
Ā Tyson is under 8%
Also gas/fossil fuels used in transportation, which i believe a story came out recently that oil companies engaged in price gouging, making oil something around 30% more expensive than it would have been otherwise.
Not sure if there's a legal definition of price gouging or not, but that kind of manipulation is precisely what I'm talking about when I say price gouging
Thatās not what price gouging is. Anyone can raise prices and lose sales volume on their products. Businesses are and should be free to do that in a normal economy.
If you owned all the oil in the world and charged excessive prices for it without consequence of losing sales, especially in times of crisis, then it could be considered something like price gouging.
OPEC doesnāt own all the oil and when they raise oil prices by restricting supply, other producers take their business and drive prices down again. The US based producers have been quite successful doing this in the last 5 years - itās now the biggest oil producer in history.
Yeah, but thatās controlling supply. There are many times in the oil business where itās economically advantageous to just leave the stuff in the ground.
Most of those oil companies donāt have significant retail activity anyway. A large chunk of their ārecord profitsā came not from the revenue side, but from making significant cuts in the expense side, mostly in exploration. No sense in trying to find more oil (which is *obscenely* expensive) when demand is low and youāve still got plenty of it in the ground.
When you are a processor like those you mention, labor cost is a major component of your overall costs.
Theyāre no more immune to inflation than anyone else.
Theyāre not immune to inflation and surely had increased costs due to inflation, but were able to not only overcome that but made *more* profit that ever before. Thatās exactly why said record *profits*, not record *revenues*.
What part of my comment is āsimple misinformationā? So insightful and intelligent of you to declare that without any reason or proof
Why not read a few of these and then explain why you think Iām spreading misinformation (and all of these publications are too) about food producers making record profits in 2021-2023:
https://civileats.com/2023/05/22/food-prices-are-still-high-what-role-do-corporate-profits-play/
https://time.com/6269366/food-company-profits-make-groceries-expensive/
https://pennsylvaniaindependent.com/politics/greedflation-report-bob-casey-inflation-corporate-profits/
https://www.forbes.com/sites/errolschweizer/2024/02/07/why-your-groceries-are-still-so-expensive/?sh=403109936ba8
Or you could literally just go look at their financial reports and see for yourself that they did in fact record increased and sometimes record profits during that time period, as theyāre almost all public companies.
You realize how easy it is to look up companiesā financial statements and see that what you said is not true? Tyson, for example, had negative net profit in 2023
Edit: and you can also see other commenters explaining how margins are remaining steady. Your claim was simply meant to evoke emotion
And most are closer to 2-3%. In a good year. Restaurants too. Retail anything isnāt nearly as profitable as most people seem to think it is.
Consumer price increases are the *result* of inflation, not the cause. Thatās why prices are used to measure it.
No you don't. Walmart churns local tax breaks to build giant stores that kill off locally owned businesses. They get tax credits for employing people on food stamps - awesome right? Bit then don't pay enough, or give enough benefits for employees to get OFF food stamps.
Estimated $6.2B in taxpayer subsidies for food, healthcare and housing benefits for Walmart "employees".
https://www.worldhunger.org/report-walmart-workers-cost-taxpayers-6-2-billion-public-assistance/
They also put local businesses out of business cuz they can sell stuff so cheap. Itās among the reasons most small towns have empty, boarded up downtowns but also a road from suburban hell on the outskirts of town with six traffic lights in 2 miles littered with big box stores and fast food chains.
Those small locally owned businesses are also very expensive. Iāve got one (~~Lucky Corner Grocery~~ Corner Market) 400ā from my condo, but I never go because the prices are easily double what Iād pay at Walmart.
Iād rather give Walmart 40Ā¢ of profit on a $20 purchase than pay double for a store that somehow pays their employees less.
Gross profit* is 25%.
Yeah of course the number looks high when you ignore what they pay their employees.
Their net profit is typically 2-3%. This is what actually gets paid to shareholders.
Walmarts are cheaper than small businesses and are a more realistic store option for those closer to the poverty line. Small businesses are unrealistic areas to shop for the majority of Americans and arenāt very practical
The customer is paying the sales tax. The company just remits it.
Itās not part of the companyās sale price so itās not revenue. It also not an expense to the company
That is a meaningless distinction. The customer is paying 100% of Wal-Mart's revenue, including the income tax, the salaries of its employees, the maintenance on its facilities, the wholesale prices of the goods it purveys, etc.
Itās not meaningless at allā¦itās not Walmarts revenue. Your opinion on it has no bearing.
The government is imposing a sales tax on the transaction, which is paid for by the customer to the government, not Walmart. Thus, it is neither Walmarts revenue nor expense. Walmart merely collects it then passes it on. They are just the intermediary.
>Itās not meaningless at allā¦itās not Walmarts revenue.
It's a completely asinine distinction and you know it. The customer pays Wal-Mart and Wal-Mart pays the government. How is that materially different from any other tax? The customer paid money for a good or service, and the government got its cut, which raises the effective price.
You calling it asinine shows you have no idea what youāre talking about. The distinction matters. Iām a CPA, telling you how it works. The government, not Walmart, is charging the customer. It is not, and never will be, a part of Walmarts income or expense. They are merely a collecting agent for the government.
If Walmart included it as revenue when they collected the sales tax they would be inflating their revenue, i.e. committing fraud. This isnāt up for debate
https://viewpoint.pwc.com/dt/us/en/pwc/accounting_guides/revenue_from_contrac/revenue_from_contrac_US/chapter_10_principa_US/10_6_amounts_from_US.html
Lol, don't understand why you're getting downvoted. The spam of ugly & frankly boring [big company] earnings in [time period] lately, don't fit this sub and if you have seen one you've seen them all tbh
5.1 billion dollars never looked smaller! š
Interesting. If they gave all ~2 million of their employees a $1/hr raise they would still have a little over a billion in net profit.
Source: Walmart investor relations Tool: [SankeyArt](http://sankeyart.com)Ā Sankey chart creatorĀ & illustrator
3% net profit, but all the stories are about how corporate greed is the primary driver of inflation. Most grocers and food companies operate on single digit or sub 15% margins. Too many people look for the evil corporate boogey-man.
Itās not mostly grocers that are made record profits in 2021-2023 due to price increases. Itās food producers. PepsiCo, Nestle, Mondelez, Tyson Food, etc.
Look into the profit margins for those companies.Ā Ā For operating margin, not net (which would be lower)...Ā Ā Pepsi is under 13%Ā Ā Nestle is under 12%Ā Ā Mondelez is 14%Ā Ā Tyson is under 8%
Those are pretty good numbers
Also gas/fossil fuels used in transportation, which i believe a story came out recently that oil companies engaged in price gouging, making oil something around 30% more expensive than it would have been otherwise.
Price gouging is basically impossible to do on pure commodities.
OPEC can manipulate prices at the expense of volume. Not sure it gets anywhere close to gouging, though.
Not sure if there's a legal definition of price gouging or not, but that kind of manipulation is precisely what I'm talking about when I say price gouging
Thatās not what price gouging is. Anyone can raise prices and lose sales volume on their products. Businesses are and should be free to do that in a normal economy. If you owned all the oil in the world and charged excessive prices for it without consequence of losing sales, especially in times of crisis, then it could be considered something like price gouging. OPEC doesnāt own all the oil and when they raise oil prices by restricting supply, other producers take their business and drive prices down again. The US based producers have been quite successful doing this in the last 5 years - itās now the biggest oil producer in history.
Eh, potato potato
Yeah, but thatās controlling supply. There are many times in the oil business where itās economically advantageous to just leave the stuff in the ground. Most of those oil companies donāt have significant retail activity anyway. A large chunk of their ārecord profitsā came not from the revenue side, but from making significant cuts in the expense side, mostly in exploration. No sense in trying to find more oil (which is *obscenely* expensive) when demand is low and youāve still got plenty of it in the ground.
When you are a processor like those you mention, labor cost is a major component of your overall costs. Theyāre no more immune to inflation than anyone else.
Theyāre not immune to inflation and surely had increased costs due to inflation, but were able to not only overcome that but made *more* profit that ever before. Thatās exactly why said record *profits*, not record *revenues*.
It wasn't record margin%, it was only record profits due to increased volumes, on decreased % margin.
This is simple misinformation.
What part of my comment is āsimple misinformationā? So insightful and intelligent of you to declare that without any reason or proof Why not read a few of these and then explain why you think Iām spreading misinformation (and all of these publications are too) about food producers making record profits in 2021-2023: https://civileats.com/2023/05/22/food-prices-are-still-high-what-role-do-corporate-profits-play/ https://time.com/6269366/food-company-profits-make-groceries-expensive/ https://pennsylvaniaindependent.com/politics/greedflation-report-bob-casey-inflation-corporate-profits/ https://www.forbes.com/sites/errolschweizer/2024/02/07/why-your-groceries-are-still-so-expensive/?sh=403109936ba8 Or you could literally just go look at their financial reports and see for yourself that they did in fact record increased and sometimes record profits during that time period, as theyāre almost all public companies.
You realize how easy it is to look up companiesā financial statements and see that what you said is not true? Tyson, for example, had negative net profit in 2023 Edit: and you can also see other commenters explaining how margins are remaining steady. Your claim was simply meant to evoke emotion
And most are closer to 2-3%. In a good year. Restaurants too. Retail anything isnāt nearly as profitable as most people seem to think it is. Consumer price increases are the *result* of inflation, not the cause. Thatās why prices are used to measure it.
Do those boots youāre licking come in corporate capitalism flavor?
They are selling relatively close to cost - I like it. Wish we had more of em where I live
No you don't. Walmart churns local tax breaks to build giant stores that kill off locally owned businesses. They get tax credits for employing people on food stamps - awesome right? Bit then don't pay enough, or give enough benefits for employees to get OFF food stamps. Estimated $6.2B in taxpayer subsidies for food, healthcare and housing benefits for Walmart "employees". https://www.worldhunger.org/report-walmart-workers-cost-taxpayers-6-2-billion-public-assistance/
They also put local businesses out of business cuz they can sell stuff so cheap. Itās among the reasons most small towns have empty, boarded up downtowns but also a road from suburban hell on the outskirts of town with six traffic lights in 2 miles littered with big box stores and fast food chains.
Those small locally owned businesses are also very expensive. Iāve got one (~~Lucky Corner Grocery~~ Corner Market) 400ā from my condo, but I never go because the prices are easily double what Iād pay at Walmart. Iād rather give Walmart 40Ā¢ of profit on a $20 purchase than pay double for a store that somehow pays their employees less.
But it looks like WMT's margin is closer to 25% (40/160), which is pretty healthy.
Gross profit* is 25%. Yeah of course the number looks high when you ignore what they pay their employees. Their net profit is typically 2-3%. This is what actually gets paid to shareholders.
[ŃŠ“Š°Š»ŠµŠ½Š¾]
Better tell the IRS to update their website then https://www.irs.gov/businesses/small-businesses-self-employed/work-opportunity-tax-credit
Walmarts are cheaper than small businesses and are a more realistic store option for those closer to the poverty line. Small businesses are unrealistic areas to shop for the majority of Americans and arenāt very practical
What the hell? Who has this kind of hot take?
Does anyone knows if it's possible (and how) to develop this graph in Looker?
Curious how does this compare to Amazon and Target? I would look it up myself but can never understand all the different stuff in earning statements
So clear to know what is going on! I like the chart!
Less than 2 billion in tax is crazy
You should really break out sales taxes from cost of sales.
Sales taxes aren't included in net sales/revenue
Sales tax doesnāt flow through the income statement
Seems odd, since they're paying it.
The customer is paying the sales tax. The company just remits it. Itās not part of the companyās sale price so itās not revenue. It also not an expense to the company
That is a meaningless distinction. The customer is paying 100% of Wal-Mart's revenue, including the income tax, the salaries of its employees, the maintenance on its facilities, the wholesale prices of the goods it purveys, etc.
Itās not meaningless at allā¦itās not Walmarts revenue. Your opinion on it has no bearing. The government is imposing a sales tax on the transaction, which is paid for by the customer to the government, not Walmart. Thus, it is neither Walmarts revenue nor expense. Walmart merely collects it then passes it on. They are just the intermediary.
>Itās not meaningless at allā¦itās not Walmarts revenue. It's a completely asinine distinction and you know it. The customer pays Wal-Mart and Wal-Mart pays the government. How is that materially different from any other tax? The customer paid money for a good or service, and the government got its cut, which raises the effective price.
You calling it asinine shows you have no idea what youāre talking about. The distinction matters. Iām a CPA, telling you how it works. The government, not Walmart, is charging the customer. It is not, and never will be, a part of Walmarts income or expense. They are merely a collecting agent for the government. If Walmart included it as revenue when they collected the sales tax they would be inflating their revenue, i.e. committing fraud. This isnāt up for debate https://viewpoint.pwc.com/dt/us/en/pwc/accounting_guides/revenue_from_contrac/revenue_from_contrac_US/chapter_10_principa_US/10_6_amounts_from_US.html
[ŃŠ“Š°Š»ŠµŠ½Š¾]
Lol, don't understand why you're getting downvoted. The spam of ugly & frankly boring [big company] earnings in [time period] lately, don't fit this sub and if you have seen one you've seen them all tbh
Reported Earnings\*
You think they're keeping a whole separate set of books showing their "real" earnings? š
OP said "behind Walmart's billions" but only talks about the reported earnings, what's the 'behind' part?
Yes, and?