Walmart profits top estimates despite slower US sales growth

Walmart announced lower second-quarter profits on Thursday, although they still exceeded analysts' predictions. The company's earnings amounted to $6.4 billion, a 9.4% decrease compared to the same period last year. Walmart's total revenues for the quarter reached $187.9 billion, a 5.9% increase from the previous year. The company raised its full-year profit and sales forecast following this news.

Comparable sales in the US, a key indicator, grew by 2.6%, slightly below the 4.1% increase observed in the first quarter. Walmart's profits were bolstered by US tariff refunds, although these were somewhat offset by price reductions. The negative impact on US sales from a price cap on ten popular pharmaceutical products, which took effect on January 1st, also played a role in the results.

Despite the slower growth in US sales, Walmart maintained that its outlook reflects the ongoing focus on recovering tariff refunds through price investments. The company highlighted that US sales were lifted by market share gains across income categories, primarily driven by upper-income households. Walmart noted that grocery sales grew more robustly than health and wellness or general merchandise, which encompasses items such as fashion.

The retail giant also emphasized the strength of its e-commerce sales, which expanded globally by 23%. Following the announcement, Walmart's shares experienced a decline of 5.7% during pre-market trading.