- Walmart's stock dropped 9% after reporting the slowest US same-store sales growth since Q4 2020, with sales increasing only 2.6%, below the forecast of 3.7%.
- Walmart CFO John David Rainey indicated that when fuel prices exceed $4, customers begin to make trade-offs, with June showing more noticeable shifts in consumer behavior.
- Walmart has cut prices on thousands of items, including beef, chips, and soda, in an effort to drive traffic to its stores.
- Walmart raised its full-year outlook but provided conservative guidance for Q3 and fiscal 2027, expecting net sales to increase by 3% to 3.75%.
Walmart's stock dropped 9% following a disappointing report on US same-store sales growth, which slowed to 2.6%, the lowest since Q4 2020. Despite beating revenue expectations with $187.9 billion in sales, the retailer's performance fell short of Wall Street's 3.7% forecast.123
CFO John David Rainey attributed the slowdown to rising fuel costs, stating, "As you go through month by month in the last quarter, you can tell when fuel prices increase and got above $4, and perhaps there's a psychological impact to that, that there are choices that consumers are making." He noted that June was particularly telling, with customers making 'trade-offs' in their purchasing habits.
Excluding health and wellness, which was affected by new drug pricing legislation, Walmart reported a 3.4% growth in core merchandise sales. E-commerce sales surged 23%, driven by promotions aimed at competing with Amazon's Prime Day.
Looking ahead, Walmart anticipates net sales growth of 3% to 3.75% for the third quarter, alongside adjusted earnings of $0.62 to $0.64. For fiscal year 2027, the company forecasts revenue growth of 4%-5% and adjusted earnings of $2.80-$2.87, which is conservative compared to Wall Street's expectations.
“Walmart's US same-store sales grew 2.6% versus the 3.7% expected, with lower drug prices and lapping GLP-1 adoption weighing on growth. The company raised its full-year outlook but gave conservative Q3 guidance, expecting net sales to rise 3% to 3.75%.”
Yahoo Finance
