- Walmart's US CEO recently discussed the impact weight loss drugs like Ozempic have had on sales.
- An analyst note from Morgan Stanley aims to clarify Walmart's remarks.
Walmart is trying to clarify the impact weight-loss drugs like Ozempic and Wegovy are actually having on its bottom line.
An analyst note from Morgan Stanley released on Tuesday included new information regarding the market-moving comments from Walmart US CEO John Furner last week on GLP-1 weight-loss drugs' impact on spending behavior.
"We definitely do see a slight change compared to the total population, we do see a slight pullback in overall basket," Furner said in an interview with Bloomberg. "Just less units, slightly less calories."
The comments resulted in dozens of news articles. Shares in Walmart and other snack-makers fell on the news.
But speaking to Morgan Stanley analysts, Walmart has clarified "two potential misconceptions," the analysts wrote.
The group of customers taking this drug that Walmart can track is small, the analysts note. But, within this group, Walmart observed these customers were spending slightly less on food year over year.
But "their overall spend is higher, even excluding the cost of the drug," the analysts wrote based on conversations with Walmart. Increased spending is coming from categories like lifestyle, fitness, and "medications to relieve side effects of the drug." These weight-loss drugs have known side effects like nausea and diarrhea.
In aggregate, GLP-1 spending changes are not moving the needle for Walmart's total business, the authors write. Walmart did not immediately respond to Insider's request for comment ahead of publication.
Of course, this doesn't mean the drugs won't be a headwind for Walmart or other retailers in the long run. But reports may have missed "the broader point that customer engagement with Walmart appears to be increasing after taking GLP-1 drugs," the analysts wrote.
Meanwhile, Walmart's US CEO hasn't been the only exec discussing Ozempic and fueling the frenzied attention around the impacts these drugs could have on companies that sell food to consumers. The buzzy drugs have been mentioned by the CEO of Kellanova, manufacturer of Cheez-It, Pringles, and Rice Krispies Treats, and Smucker's CEO, too. Both executives said they're monitoring research.
And not unlike AI becoming the buzzword of choice in tech earnings calls this year, data from Alphasense showed mentions of "Ozempic" in consumer product earning calls, company documents, and related news have gone up 228% in the last 90 days. Mentions of "GLP-1" have increased 99%, Insider previously reported.