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Walmart stock drops after tariff refund fails to lift sales outlook
Walmart reported gross margin of 25.4% after about $2.9 billion in tariff refunds, but investors focused on 2.6% comparable sales versus the 3.5% Street expectation.
Walmart’s tariff refund of roughly $2.9 billion, which boosted gross margin to 25.4%, helped the company beat on revenue and adjusted earnings, but its shares fell more than 8% as investors weighed the sales picture. According to Yahoo Finance, the immediate selloff followed disclosure of comparable sales of 2.6% compared with 3.5% expected by analysts.
Walmart added $1.65 to a headline EPS of $4.11, which doubled year over year, but investors also looked past the one-time effect. With the refund stripped out, adjusted EPS was $2.46 versus a $2.33 estimate, while comparable sales still missed.
In contrast, Target received a similar tariff refund, about $994 million, and the market treated that outcome as a beat. Yahoo Finance said Target’s comparable sales were 3.8% versus 2.4% expected and that adjusted EPS landed above expectations even after excluding the one-time benefit, leaving Walmart as the weaker print.
The article also argued that the refund functioned as a one-time windfall rather than an enduring improvement, since other major retailers received comparable checks after a February Supreme Court ruling against IEEPA tariffs. As a result, investors, Yahoo Finance reported, largely backed out the rebate and graded operating performance and underlying comparable sales.