Walmart is slashing prices on clothing and other items

Many shoppers have pulled back on buying clothing and other discretionary items as the highest inflation in four decades pinches their pocketbooks.

That's left Walmart and other retailers stuck with too much clothing and bigger-ticket stuff sitting on their shelves. To help clear out the backlog, Walmart is cutting prices on some items and marking down products.

"The increasing levels of food and fuel inflation are affecting how customers spend," Walmart CEO Doug McMillon said in a news release Monday. "Apparel in Walmart U.S. is requiring more markdown dollars."

The company expects a slowdown on customer spending for general merchandise in the second half of the year, McMillon said.

Walmart is the largest retailer in the United States, and its move could prompt rivals to bring down prices in these areas.

While lower prices and markdowns are welcome news for shoppers, they mean lower profit for companies. Clothing and general merchandise are more profitable for Walmart than groceries and consumable items.

Walmart in its announcement Monday cut its profit outlook for the second quarter and the remainder of the year.

The company's stock fell 9% during after-hours trading. Amazon, Target and other retailers' stocks also dropped following the news from Walmart.