Walmart Shares Plunge 10% to 9-Month Low After Slowest US Sales Growth in Six Years

Walmart Shares Plunge 10% to 9-Month Low

Walmart shares came under heavy selling pressure on Thursday, August 20, after the retail giant reported a significant slowdown in US comparable sales growth.

The stock plunged around 10% to $103 per share, touching a nine-month low after the company missed quarterly comparable sales expectations for the first time in more than five years.

The weaker performance was primarily linked to higher gasoline prices, cautious consumer spending and pressure on Walmart's pharmacy business.

Despite the sharp decline in the stock, Walmart reported stronger-than-expected quarterly revenue and adjusted earnings and also raised its full-year sales guidance.

Walmart Share Price Today

Walmart shares fell sharply after investors reacted negatively to the company's latest quarterly sales figures.

US comparable sales, excluding fuel, increased 2.6%, compared with 4.1% growth in the previous quarter.

The 2.6% growth rate was also the slowest pace in more than six years.

The weaker sales momentum raised concerns about consumer spending and the outlook for Walmart's US operations.

Why Did Walmart Shares Fall?

The biggest factor behind the decline was slower US comparable sales growth.

Walmart's US comparable sales growth came in below analyst expectations, marking the first quarterly miss in more than five years.

The company's pharmacy business also weighed on sales as lower drug prices affected performance.

Walmart said a price cap on 10 top-selling pharmaceutical products that came into effect on January 1 contributed to the pressure.

Excluding health and wellness, US comparable sales increased 3.4%.

Despite the slowdown, Walmart said it continued to gain market share, particularly in groceries, as it lowered prices on various products.

Rising Gasoline Prices Pressure Consumers

Higher gasoline prices have become another challenge for Walmart.

As fuel costs rise, consumers may have less disposable income available for discretionary purchases.

Walmart CFO John David Rainey said consumers are increasingly making spending trade-offs when gasoline prices rise.

Lower-income households have been particularly affected by elevated gasoline prices.

Store traffic growth also slowed to 1.5% during the latest three-month period, compared with 3% in the first quarter.

The slowdown indicates that consumers are becoming more selective and increasingly focused on value and discounts.

Walmart Q2 Revenue and Earnings

Despite weaker comparable sales growth, Walmart's overall quarterly financial performance remained strong.

The company reported fiscal second-quarter revenue of approximately $187.94 billion, representing a 5.9% year-on-year increase.

Adjusted earnings came in at $0.81 per share.

Both revenue and adjusted earnings were above market expectations.

The results also benefited from US tariff refunds, although Walmart said the benefit was partly offset by price reductions.

Walmart Raises Full-Year Guidance

One of the positive developments from the results was Walmart's decision to raise its full-year sales outlook.

The company now expects fiscal 2027 net sales to grow between 4% and 5%.

Previously, Walmart had forecast sales growth of between 3.5% and 4.5%.

However, the company's third-quarter outlook was more cautious.

Walmart expects third-quarter adjusted earnings per share of between $0.62 and $0.64, below analysts' expectations of around $0.68.

The company expects third-quarter net sales growth of between 3% and 3.75%.

Consumer Spending Remains a Key Concern

The latest Walmart results highlight the pressure facing US consumers.

Although consumer spending has remained relatively resilient, households are becoming more selective about where they spend their money.

Higher fuel costs can reduce disposable income, particularly for lower-income households.

Consumer sentiment also weakened in August, while the US labour market has shown signs of softness.

For Walmart, the key challenge will be maintaining sales momentum while continuing to offer competitive prices.

Walmart Stock Performance

Walmart shares have faced increasing volatility in recent months as investors have become more cautious about the company's US growth outlook.

The latest decline pushed the stock to approximately $103, its lowest level in around nine months.

The sharp reaction also reflects the high expectations investors have placed on Walmart following its strong performance over recent years.

Despite the latest weakness, Walmart continues to benefit from its large store network, grocery business, scale and strong position among value-conscious consumers.

Walmart Stock Outlook

The near-term outlook for Walmart shares is likely to depend heavily on consumer spending trends.

Investors will be watching whether the slowdown in comparable sales continues in the coming quarters or proves to be temporary.

The company's ability to maintain market share, control costs and manage pricing pressure will also remain important.

At the same time, higher gasoline prices, inflation, labour-market conditions and consumer confidence could influence Walmart's future performance.

The company's raised full-year guidance provides a positive signal, but the weaker third-quarter earnings outlook indicates that near-term conditions remain challenging.

Key Factors to Watch

Several factors could influence Walmart shares in the coming months

• US consumer spending
• Gasoline and crude oil prices
• US inflation
• Consumer confidence
• Store traffic
• Comparable sales growth
• Pharmacy pricing
• Grocery sales
• Walmart's profit margins
• Third-quarter earnings
• Full-year guidance

Investors should also monitor broader US economic conditions because changes in employment, wages and household purchasing power can directly affect retail demand.

Key Takeaways

Walmart shares fell around 10% to $103, hitting a nine-month low.

US comparable sales increased 2.6%, excluding fuel, compared with 4.1% in the previous quarter.

The latest comparable sales growth was the slowest in more than six years.

Walmart reported fiscal Q2 revenue of approximately $187.94 billion, up 5.9% year-on-year.

Adjusted earnings stood at $0.81 per share, beating expectations.

Higher gasoline prices and cautious consumer spending weighed on the company's performance.

Walmart raised its fiscal 2027 sales growth guidance to 4%-5% from the previous 3.5%-4.5% forecast.

The stock's near-term direction could depend on consumer spending, fuel prices, store traffic and upcoming earnings.

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