Walmart (WMT) raised its full-year financial outlook after beating Wall Street estimates on both the top and bottom lines, but the stock fell 6% in premarket trading after US same-store sales slowed.
America’s biggest retailer, often considered a bellwether for the industry, posted revenue growth of nearly 6% to $187.9 billion, above the roughly $186 billion expected, per Bloomberg consensus data. Adjusted earnings per share clocked in at $0.81, also higher than the $0.74 expected.
However, US same-store sales grew 2.6%, below Wall Street’s forecast of 3.7%. This was the slowest pace of US same-store sales growth since Q4 of 2020.
Cheaper drug prices dragged sales growth lower. Excluding health & wellness, which was negatively impacted by maximum fair price legislation that allows Medicare to negotiate drug prices, Walmart reported 3.4% same-store sales growth in core merchandise.
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During the quarter, Walmart looked to gain share with cost-conscious consumers by cutting prices on thousands of items, including beef, chips, and soda.
“We continue to make steady progress on the long-term value drivers of our business,” Walmart CEO John Furner said in the release, “Our multi-year growth in eCommerce is evidence that customers are choosing Walmart because we deliver price, speed, and convenience across a broad assortment. At Walmart, they can have it all.”
Traffic and ticket sizes came in lower than what Wall Street expected for the quarter.
E-commerce sales were up 23%, above the expected 22% jump, with a 24% increase in the US alone, likely tied to promotions Walmart ran to compete with Amazon’s (AMZN) Prime Day event.
Operating income grew by roughly 21% year over year, as gross profit increased by 158 basis points, driven by a tariff refund benefit and partially offset by price investments and higher fuel costs.
For the third quarter — comprising the crucial back-to-school season and the beginning of the retailer’s holiday plans — Walmart expects net sales to increase 3.0% to 3.75%, alongside adjusted earnings of $0.62 to $0.64.
For fiscal year 2027, Walmart forecast revenue to increase by 4%-5% and adjusted earnings of $2.80-$2.87. That guidance was conservative compared with the nearly 5% growth Wall Street predicted and original estimates of adjusted earnings of $2.97 per share for the year.
IEEPA tariff refunds were not included in the guidance, but the company said it could be eligible for a return worth roughly 0.5% of its US annual sales. Based on the 2025 revenue of $483 billion, that would mean a roughly $2.4 billion tailwind for the business.
