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Walmart shares fall after slower US same-store sales
Walmart lifted its full-year outlook and beat on revenue and adjusted EPS, but US same-store sales growth of 2.6% missed the 3.7% forecast and was the weakest since Q4 2020.
Walmart’s stock fell about 9% after US same-store sales growth slowed, even as the retailer raised its full-year outlook following results that beat Wall Street on both the top and bottom lines, according to Yahoo Finance citing Bloomberg consensus data.
The company reported revenue growth of nearly 6% to $187.9 billion, above the roughly $186 billion expected, while adjusted earnings per share came in at $0.81 versus the $0.74 estimate. Still, US same-store sales rose 2.6%, below the 3.7% forecast and the slowest pace since Q4 2020.
Walmart said lower drug prices weighed on overall sales growth, and it pointed to the impact of maximum fair price legislation that allows Medicare to negotiate drug prices. Excluding health and wellness, same-store sales rose 3.4%, with the company also noting it was lapping strong growth in GLP-1 adoption from the prior two years.
To attract cost-conscious shoppers, Walmart cut prices on thousands of items, including beef, chips, and soda. On the earnings call, the company’s CFO, John David Rainey, linked the pattern of consumer “trade-offs” to periods when fuel prices rose above $4, and Yahoo Finance also noted traffic and ticket sizes were below what Wall Street expected for the quarter.