Walmart reported quarterly results that mixed strong headline numbers with investor disappointment Thursday. The company posted net revenue of $187.94 billion, up from $177.40 billion in the year-earlier period, and raised its full-year sales guidance to between 4% and 5% growth compared with prior expectations of 3.5% to 4.5%. However, the stock declined approximately 9% as Wall Street focused on softer-than-expected comparable sales metrics.
Quarterly comparable sales growth of 2.6% in the U.S. fell short of Wall Street expectations of 3.5%, according to FactSet. The company attributed part of the shortfall to a 0.8% headwind in its health and wellness business following the implementation of price caps on certain drugs. E-commerce sales demonstrated strength globally, rising 23% during the period. Total quarterly net income reached $6.37 billion compared with $7.03 billion in the prior year period.
Management emphasized the underlying strength of the business despite market reaction. Chief Financial Officer John David Rainey noted that the company expected to receive approximately $2.9 billion in tariff refunds, with nearly $100 million remaining to be collected. These funds are planned for price reductions for consumers with effects visible in the upcoming quarter. The company also projected incremental cost headwinds exceeding $2 billion related to higher fuel prices.
For the third quarter, Walmart guided for net sales increases between 3% and 3.75% alongside adjusted earnings per share between 62 cents and 64 cents. The company raised full-year adjusted earnings per share guidance to between $2.80 and $2.87 from the prior range of $2.75 to $2.85. Growth areas included Walmart+ membership fee revenue, which jumped 17%, global advertising revenue up 38%, and Sam’s Club U.S. net sales climbing 8.8% to $25.7 billion.
Management indicated consumer spending remained resilient despite acknowledged financial pressures from elevated food and fuel costs. The company noted particular success gaining market share among higher-income customers through convenience improvements and membership benefits. Gross profit rate expanded to 25.4%, supported by tariff refund benefits.
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