Walmart reported its slowest US comparable-sales growth in six years on Thursday, August 20, as households facing higher fuel and everyday costs became more selective about spending. Comparable sales at Walmart US, excluding fuel, rose 2.6% in the fiscal second quarter, below market expectations, and the retailer's shares fell more than 8% during the session.
The result matters beyond the company because Walmart, the world's largest retailer, sells essentials to a broad range of American households and is closely watched as an indicator of consumer demand. The 2.6% increase compares with 4.1% growth in the previous quarter. Associated Press reporting said lower-income shoppers remained particularly cautious as prices at petrol stations and elsewhere strained budgets.
Total quarterly revenue nevertheless increased 5.9% from a year earlier to $187.9 billion, slightly above the $186.8 billion expected by analysts surveyed by S&P Capital IQ, according to Axios. Walmart US comparable sales excluding the health and wellness category grew 3.4%, showing that pharmacy-related effects weighed on the headline measure. The company linked part of that pressure to federal Medicare rules that cap prices for some expensive medicines.
Walmart raised its full-year net-sales growth forecast to a range of 4% to 5%, from 3.5% to 4.5%, and lifted its adjusted earnings forecast to between $2.80 and $2.87 per share, Reuters reported. Even so, investors viewed the guidance as cautious. The company also indicated that it is using expected tariff refunds to support lower prices rather than treating the money solely as an addition to profit margins.
The sharp share-price fall showed that investors focused on weaker US momentum despite higher revenue and an improved annual forecast. Walmart's size means the slowdown may intensify scrutiny of consumer health, retail pricing and the effect of fuel, medicine and import costs across the economy. Future quarters will show whether cautious spending is temporary or signals a broader loss of momentum among US households.
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