Walmart (WMT) Stock Plunges 6% After Weak U.S. Comparable Sales Growth

Key Takeaways

• Walmart’s Q2 adjusted earnings per share reached $0.81, surpassing the $0.74 analyst projection
• The retailer reported $187.9 billion in revenue, representing 5.9% year-over-year growth and exceeding expectations
• U.S. comparable store sales increased only 2.6%, falling short of the 3.67% Wall Street consensus
• Updated full-year adjusted EPS forecast still trails analyst projections despite being raised
• WMT shares declined 6% during Thursday’s premarket session

Shares of Walmart tumbled 6% in Thursday’s premarket session as the retail giant’s U.S. comparable sales expansion significantly underperformed Wall Street expectations, overshadowing its earnings and revenue achievements.

WMT was changing hands at approximately $107.40 before the market opened, sliding from Wednesday’s close of $114.30.

Walmart Inc., WMT

The company’s second-quarter adjusted earnings per share hit $0.81, exceeding the $0.74 Wall Street consensus. Total revenue climbed to $187.9 billion, representing 5.9% year-over-year expansion and beating the $186.75 billion forecast.

However, the critical weakness emerged in comparable sales performance. Walmart’s U.S. stores recorded comp sales growth of merely 2.6%, significantly trailing the 3.67% analyst estimate. This represents the retailer’s weakest U.S. sales expansion in six years.

Mizuho’s analyst David Bellinger characterized the results as a “worst-case scenario” and “one of the biggest misses in years from WMT.”

The retail behemoth has faced headwinds throughout the summer months. Shares had already retreated approximately 15% following the company’s previous quarterly report in mid-May, pressured by anxieties surrounding lower-income consumer spending patterns and inflationary pressures stemming from the Iran War.

While the retailer is set to receive billions in tariff reimbursements, CFO John David Rainey indicated these funds will be allocated toward reducing prices and enhancing customer experience rather than margin expansion.

The gross profit rate expanded by 96 basis points, while operating income jumped 28.8%. Measured on an adjusted constant currency basis, this metric increased 17.4%.

Positive Performance Areas

The company’s global eCommerce operations expanded 23%, fueled by store-fulfilled pickup and delivery services along with marketplace expansion. Global advertising revenue soared 38%, with Walmart U.S. advertising matching that impressive growth rate.

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

Updated Outlook Falls Short of Expectations

Looking ahead to fiscal 2027, Walmart elevated its full-year adjusted EPS outlook to $2.80 to $2.87, up from the previous range of $2.75 to $2.85. Net sales are projected to expand 4% to 5% in constant currency terms, revised upward from earlier guidance of 3.5% to 4.5%.

Wall Street analysts had anticipated $2.90 per share and 5.5% sales growth. The company’s revised outlook remained below expectations on both metrics.

For the third quarter, Walmart projects net sales growth between 3% and 3.75% with adjusted operating income growth of 2% to 4%. Management highlighted a headwind exceeding 100 basis points related to the timing shift of Flipkart’s Big Billion Days promotional event between Q3 and Q4.

Notwithstanding the share price decline, analyst sentiment remains predominantly positive. Among 45 analysts monitored by FactSet, all but seven maintain bullish ratings on Walmart, with an average price target approaching $140.

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