Walmart experienced its slowest U.S. comparable sales growth in six years during its most recent quarter, with a 2.6% increase. This figure was below Wall Street's expectations of a 3.5% to 3.8% rise, according to FactSet, and marks a significant slowdown from the 4.1% growth seen in the first quarter. Excluding the wellness category, which was impacted by federal legislation capping prices on some Medicare drugs, comparable sales rose 3.4%. The news led to Walmart's shares falling by approximately 8% to 9% on Thursday, dragging down the broader U.S. stock market.
Despite the slower sales growth, Walmart raised its full-year guidance for net sales, now expecting an increase of 4% to 5%, up from the previous 3.5% to 4.5%. Adjusted earnings per share are projected to be between $2.80 and $2.87, compared to the prior guidance of $2.75 to $2.85. This optimism comes partly from the company's receipt of nearly $2.9 billion in tariff refunds, with approximately $100 million still pending. Walmart plans to use these funds to lower prices for consumers, with the impact expected to be seen in the third quarter.
Walmart's Chief Financial Officer, John David Rainey, emphasized that the company is prioritizing price investments to help consumers grappling with high fuel and food costs. He noted that while consumers are still spending, they are feeling stretched thin. The company has already implemented over 11,000 price rollbacks across its U.S. stores and is focusing on reducing prices for items like beef. Rainey also highlighted the increasing irrelevance of traditional store comparable sales as e-commerce, which saw a 23% global increase and a 24% U.S. increase, becomes a more significant driver of growth, with stores increasingly serving as fulfillment centers for online orders.
