Last week, Walmart U.S. CEO John Furner said in an interview that the company has seen the impact of weight-loss drugs like Ozempic and Wegovy on food shopping demand, saying it "did see a slight decrease in the overall shopping basket. A little less stuff, a little less calories."
His remarks were widely reported by the media and even attracted the attention of Tesla CEO Elon Musk, who commented: "I didn't expect that the weight loss drug Ozempic really affected Walmart's food sales. Although no drug is without side effects, the health risks related to obesity almost certainly exceed the risks of GLP-1 receptor agonists."
Shares of Walmart and other snack makers fell after the news.
Now, Walmart is trying to clarify the actual impact of weight-loss drugs like Ozempic and Wegovy on its bottom line.
In conversations with Morgan Stanley analysts, Walmart clarified "two potential misunderstandings," according to a note released by the bank on Monday.
Analysts at Morgan Stanley noted that the group of customers Walmart can track taking the drug is small. Within this group, Walmart observed that these customers are spending slightly less on food than last year.
However, "their overall spending is higher, even after stripping out drug costs," analysts wrote based on conversations with Walmart. Increased spending came from categories such as lifestyle, fitness and "meds to relieve the side effects of medications." These diet pills are known to have side effects such as nausea and diarrhea.
Overall, changes in GLP-1 drug spending have not changed Walmart's overall business, Morgan Stanley analysts wrote.
Of course, that doesn't mean these drugs won't adversely affect Walmart or other retailers in the long run. But previous reports may have overlooked "the broader point that Walmart's customer engagement appears to increase after taking the GLP-1 drug," the analysts wrote.