Walmart shares fell significantly on Thursday following the retailer’s quarterly earnings announcement. Although the company delivered revenue that exceeded Wall Street expectations and raised its financial guidance for the year, investors reacted negatively to certain aspects of the performance metrics and forward-looking statements.
The retailer reported quarterly revenue of $187.94 billion, up from $177.40 billion in the prior year period, representing overall growth of 5.9%. Global e-commerce sales posted strong performance with a 23% increase. However, U.S. comparable sales growth of 2.6% came in below the 3.5% level that analysts had anticipated. This shortfall was partly attributed to a 0.8% headwind from the health and wellness segment, where price controls on certain medications took effect during the quarter.
Walmart raised its full-year sales guidance to between 4% and 5% growth, up from the previous range of 3.5% to 4.5%. The company also increased its adjusted earnings per share outlook to between $2.80 and $2.87, compared with prior guidance of $2.75 to $2.85. For the third quarter specifically, Walmart projected net sales increases between 3% and 3.75% and adjusted earnings per share between 62 cents and 64 cents. Company leadership stated the business remained strong, citing progress across various segments.
The retailer is positioned to benefit from approximately $2.9 billion in tariff refunds, with less than $100 million still pending. Management indicated plans to deploy these funds toward price reductions for consumers in the third quarter. Separately, Walmart anticipated incurring just over $2 billion in incremental cost pressures from elevated fuel prices throughout the year. Several business segments demonstrated strength, including membership fee revenue which jumped 17% and global advertising revenue which climbed 38%. Sam’s Club U.S. net sales reached $25.7 billion, up 8.8% annually, while membership fees rose 6%.
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