Key Takeaways:
- Revenue hit $187.9B, beating estimates, but US comp sales grew just 2.6%
- Q3 guidance missed consensus on EPS and sales, citing Flipkart timing shift
- Tariff refunds of $3B lifted operating income 28.8% to $9.4B
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Walmart drops 8% on slowest same-store sales growth since 2020
Walmart shares fell 8 percent to $105.45 after Q2 FY27 US same-store sales grew 2.6 percent, the slowest pace since 2020.
Bank of America Securities analyst Christopher Nardone had forecast 3.5 percent comparable sales growth in a pre-earnings note. Bloomberg reported the 2.6 percent pace was Walmart's weakest domestic showing since 2020. The miss erased roughly $50 billion in market value.
Revenue reached $187.9 billion, up 5.9 percent and above the $186.7 billion consensus. Adjusted EPS of $0.81 beat the $0.74 estimate, up 19 percent year over year. Customer visits rose 1.5 percent while spending per trip grew just 1.1 percent, as fuel prices near $4.09 per gallon squeezed discretionary budgets.
The company guided Q3 adjusted EPS of $0.62 to $0.64, below the $0.68 consensus, and sales of $183.1 billion to $184.5 billion, trailing the $188.3 billion estimate. Management cited a timing shift in Flipkart's major sale event. Full-year guidance was raised to $2.80-$2.87 adjusted EPS.
Operating income jumped 28.8 percent to $9.4 billion, helped by nearly $3 billion in tariff refunds that added 96 basis points to gross margin. Management plans to pass those savings back through lower prices in the second half. E-commerce sales rose 24 percent in the US and 23 percent globally, while Sam's Club posted 4.4 percent comparable growth as bulk-buying value hunters kept spending.
The slowdown at Walmart, which serves about 280 million customers weekly, carries weight beyond one retailer. Consumer spending drives roughly two-thirds of US economic output, making the company a bellwether for the broader economy. Treasury yields near multi-decade highs keep credit card and car loan costs elevated, and fresh signs of weak spending could shift Federal Reserve rate expectations before the September meeting.
The consumer looks bent, not broken — visits kept growing and e-commerce climbed. Investors will watch Q3 results for clarity on the Flipkart impact and whether shoppers are tapped out or catching their breath.
This article is for informational purposes only and does not constitute investment advice.
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