Walmart Inc. (NASDAQ:WMT) stock fell Thursday after the retailer’s U.S. sales growth slowed to its weakest pace since 2020. The company also issued a third-quarter outlook below Wall Street estimates.
For the third quarter, the company expects adjusted earnings of 62 cents to 64 cents per share, below the 68-cent estimate. It forecasts sales of $183.134 billion to $184.468 billion, compared with the $188.339 billion estimate.
Walmart Earnings Beat Estimates
The company reported adjusted earnings of 81 cents per share, beating the consensus estimate of 74 cents. Sales reached $187.9 billion, topping the $186.8 billion estimate.
Global e-commerce sales rose 23%. Walmart U.S. grew 24%, Sam’s Club U.S. gained 26% and International increased 19%.
Walmart U.S. net sales rose 3.5%, while comparable sales excluding fuel increased 2.6%. Sam’s Club U.S. comparable sales climbed 4.4%, supported by 7% transaction growth.
Maximum Fair Price regulations reduced Walmart U.S. second-quarter comparable sales by about 125 basis points. Walmart expects a similar headwind for fiscal 2027.
E-commerce now represents more than 23% of Walmart U.S. sales. Stores fulfill about 80% of e-commerce orders and all fast deliveries.
International sales rose nearly 8% in constant currency, led by 9.7% growth in China.
Enterprise adjusted operating income increased more than 17% in constant currency. Tariff refunds added about 750 basis points to operating income growth.
Cuts Prices On 11,000 Items
During the earnings call, Walmart executives said the company rolled back prices on 11,000 U.S. items during the second quarter. The retailer also continues to gain business from higher-income households.
The initiative began in late July. Management said it is pleased with the start of the back-to-school season.
Walmart’s outlook assumes fuel prices and tariffs remain at current levels. The annual forecast also assumes slightly stronger second-half sales than previously expected, helped by investments in lower prices.
Walmart Raises Full-Year Outlook, But Trails Street
Walmart raised its fiscal 2027 adjusted earnings outlook to $2.80 to $2.87 per share from $2.75 to $2.85. The consensus estimate is $2.90.
The company also raised its fiscal 2027 sales outlook to $734.656 billion to $741.720 billion from $731.124 billion to $738.188 billion. Wall Street expects $752.250 billion.
It expects more than $2 billion in additional fuel costs this year. The Vibe acquisition and integration is expected to create a 20-basis-point operating income headwind.
The timing of Flipkart’s Big Billion Days is expected to reduce third-quarter sales growth by more than 100 basis points. Walmart expects a similar benefit in the fourth quarter.
The company expects Sam’s Club U.S. and International to remain accretive to enterprise sales growth in both quarters.
Walmart was eligible for about $2.9 billion in refunds and has received most of the money. The retailer is reinvesting much of the proceeds in lower prices and customer experience.
WMT Price Action: Walmart shares were down 8.81% at $104.23 at the time of publication on Thursday, according to Benzinga Pro data.
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