Shares of Walmart (WMT) tumbled approximately 7% during Thursday’s premarket session after the retail giant reported that U.S. comparable sales expanded by 2.6%, significantly trailing the 3.67% Wall Street consensus. The disappointment pushed shares below their year-to-date starting point, and the domestic comparable-sales figure represented the slowest growth in six years — even though the company beat expectations on both earnings and revenue. For a company that often serves as a read on consumer spending and value-oriented shopping trends, the gap between strong top- and bottom-line results and softer U.S. comparable sales is what drew the market’s attention.

The retailer announced second-quarter adjusted earnings of $0.81 per share, exceeding analyst projections of $0.74. Total revenue reached $187.9 billion, climbing 5.9% year over year and surpassing the anticipated $186.75 billion. Despite the headline beats, the underwhelming U.S. comparable-sales figure triggered the selloff. Mizuho’s David Bellinger characterized the results as a “worst-case scenario” and “one of the biggest misses in years from WMT.”

Company executives clarified that comparable sales would have reached 3.4% if health and wellness categories were excluded, noting that the segment faced headwinds from pharmacy-related deflation linked to maximum fair price regulations. The retailer emphasized that it is strategically reducing prices to capture additional market share, positioning the sales slowdown as a deliberate reinvestment strategy rather than evidence of weakening consumer demand.

Analyst Community Maintains Confidence

Jefferies’ Corey Tarlowe reaffirmed his Buy recommendation, highlighting ongoing transaction volume expansion, widespread market share capture, and robust performance across e-commerce, advertising, marketplace operations, and membership programs.

Steven Shemesh of RBC Capital Markets observed that Walmart achieved nearly 10% operating profit expansion when tariff refunds are excluded from calculations. He characterized the deceleration as reflective of “broader macro dynamics” instead of evidence that Walmart’s competitive gains are diminishing.

UBS’ Michael Lasser acknowledged that the results will likely spark discussion but confirmed his firm’s continued optimistic stance. Evercore ISI’s Greg Melich maintained his Outperform rating while noting that annual sales guidance was upgraded to growth of 4.0% to 5.0%, compared with the previous range of 3.5% to 4.5%.

Strategic Initiatives Continue Delivering Results

Worldwide eCommerce revenue jumped 23%, powered by store-fulfilled pickup services, delivery options, and marketplace expansion. The company’s international advertising platform posted 38% growth, with domestic advertising also climbing 38%.

Operating income surged 28.8%, or 17.4% when adjusted for constant currency. Gross profit margin improved by 96 basis points, a result partially attributed to tariff refunds collected during the quarter. CFO John David Rainey indicated that the retailer plans to reinvest those tariff refunds into enhancing customer experience and implementing additional pricing strategies during the latter half of the fiscal year.

Looking ahead to the third quarter, Walmart projects net sales growth between 3.0% and 3.75% on a constant-currency basis and issued Q3 adjusted EPS guidance of $0.62 to $0.64. Management highlighted an anticipated headwind exceeding 100 basis points resulting from a calendar shift of Flipkart’s Big Billion Days promotion between the third and fourth quarters.

The company also elevated its full fiscal 2027 adjusted EPS outlook to a range of $2.80 to $2.87 per share, up from the previous guidance of $2.75 to $2.85.

“Our team delivered another good quarter, and we continue to make steady progress on the long-term value drivers of our business,” stated John Furner, President and CEO of Walmart U.S.

Source: Blockonomi