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Walmart Sees the Slowest Pace in US Comparable Sales in 6 Years and Offers Cautious Guidance
U.S. comparable sales rose 2.6% and Walmart cut its outlook below Wall Street estimates, with shares falling 6% before the opening bell.
On Thursday, Walmart reported quarterly U.S. same-store sales growth of 2.6%, missing Wall Street projections of 3.8% and marking the slowest pace in six years, sending shares down 6% before the opening bell.
Shoppers pulled back on spending amid rising gas prices, while the Inflation Reduction Act's requirement that pharmacies dispense Medicare drugs at capped prices pressured results; excluding pharmacy impacts, core comparable sales rose 3.4%.
CEO John Furner pointed to growth in e-commerce, which rose 24%, while the advertising business Walmart Connect grew 43%, and the company raised annual sales and profit targets for the first time this year.
Quarterly net income reached $6.37 billion, or 80 cents per share, while adjusted per-share results of 81 cents topped analyst projections of 74 cents; the company issued cautious third-quarter guidance below estimates.
"For the consumer economy, this is like Nvidia posting a slowdown," said Brian Jacobsen, chief economic strategist at Annex Wealth Management, noting the retailer captured wealthier customers but trade-down spending tailwinds may be fading.