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Walmart shares fall 10% after US comparable sales growth slows
US comparable sales rose 2.6% excluding fuel, slowing for the second straight quarter as rising gasoline prices and pharmacy pricing pressures weighed on results.
Walmart shares slid 10% to a nine-month low of $103 apiece on Thursday after the retailer reported slower US comparable sales growth, missing quarterly comparable sales expectations for the first time in more than five years, according to LiveMint Markets citing Reuters.
The slowdown was linked to shoppers pulling back amid rising gasoline prices. US comparable sales grew 2.6% excluding fuel, down from 4.1% in the first quarter and below analysts' estimates, while the pace was the slowest in more than six years. Walmart said pricing pressure in its pharmacy business weighed on sales, pointing to federal negotiations and a price cap on 10 top-selling pharmaceutical products that took effect on 1 January, and it noted comparable sales growth has slowed for two consecutive quarters.
The company also highlighted that excluding health and wellness, US comparable sales rose 3.4%, the slowest since the first quarter of fiscal 2023. Walmart said it continued to gain market share, including in groceries, by lowering prices on various products.
Despite the sales pressure, Walmart raised its full-year guidance for sales and adjusted operating income. For the fiscal second quarter, it reported revenue of $187.94 billion, up 5.9%, and adjusted earnings of $0.81 per share, both above market expectations, with results boosted by US tariff refunds that were partially offset by price reductions. CFO John David Rainey said fuel prices above about $4 can have a psychological impact that leads consumers to make trade-offs.
Latest closeGasoline (RBOB) $2.901 ▼7.3%