Walmart strong again in second quarter, but its outlook is reserved

Walmart experienced its weakest growth in U.S. comparable sales in six years during its latest quarter, prompting cautious guidance for the remainder of the year from the retailer. The second quarter saw a 2.6% rise in comparable sales, falling short of the 4.1% increase in the previous quarter. This decline was attributed to the impact of rising prices and higher gas pump costs, as well as consumer cautiousness.

Walmart's shares plummeted more than 8% on Thursday, contributing to a decline in the U.S. stock market. Despite the slowdown, Walmart's earnings exceeded expectations, driven by a $2.9 billion tariff refund, and it also topped revenue projections. The company is actively lowering prices on 11,000 items, particularly in groceries and general merchandise, to maintain market share amid the economic pressures.

Walmart's e-commerce segment, a growth engine, saw a 24% increase, representing 23% of the overall U.S. business, doubling its share from five years ago. CEO John Furner emphasized the growing importance of these businesses and the shifting business landscape. The company's financial performance indicates continued strength in higher-income households, with market share gains primarily from consumers earning over $100,000 annually.

Walmart expects third-quarter earnings per share to range between 62 and 64 cents, with sales projected to grow 3% to 3.75%, placing the company's sales forecast between $184.9 billion and $186.23 billion for the quarter. For the full year, Walmart anticipates earnings per share between $2.80 and $2.87 and sales growth ranging from 4% to 5%, projecting total sales between $741.7 billion and $748.8 billion.