Walmart raised its full-year outlook despite slowing growth of its core sales business, as the retail giant expects to benefit from billions of dollars in tariff refunds.
The company said on Thursday its revenue rose 5.9 percent to $187.9 billion in the second quarter of fiscal 2027. For the three months ended July 31, Walmart reported net income of $6.37 billion, down from $7.03 billion a year earlier.
Much of the growth came from Walmart’s digital business. U.S. e-commerce sales rose 24 percent, while Walmart Connect, the company’s advertising unit, recorded a 43 percent increase during the quarter.
However, U.S. comparable sales—which include stores and digital channels operating for at least 12 months—rose 2.6 percent, excluding fuel, below Wall Street expectations in the high-3-percent range.
It was also Walmart’s smallest quarterly comparable-sales gain since the COVID-19 pandemic.
Walmart said the figure was weighed down by federal drug-price negotiations under the so-called Inflation Reduction Act, which reduced spending in its health and wellness business. Excluding that headwind, comparable sales would have risen 3.4 percent, still below expectations.
Average spending per transaction increased 1.1 percent during the quarter, also slowing from 3.1 percent growth a year earlier. Still, Walmart raised its outlook for the year.
For the third quarter, the retailer expects net sales to increase between 3 percent and 3.75 percent.
For the full year, Walmart now expects net sales to rise between 4 percent and 5 percent, up from its previous forecast of 3.5 percent to 4.5 percent growth. It also expects adjusted earnings of $2.80 to $2.87 per share, up from its previous guidance of $2.75 to $2.85 per share.
The retailer said it has received nearly all of the $2.9 billion in tariff refunds it had expected and is reinvesting those savings in prices, particularly in grocery and general merchandise, which account for the bulk of its retail sales.
Consumers, however, may not immediately see that reinvestment reflected in lower prices.
“You don’t necessarily expect to have that offsetting benefit to the lower prices in the immediate period,” CFO John David Rainey said during an earnings call Thursday.
Shares of Walmart sank more than 8 percent in early trading, as investors appeared disappointed by the company, which has developed a track record in recent years of comfortably beating comparable-sales estimates.
Consumers Make Tradeoffs
Walmart’s slower growth comes as many American shoppers remain cautious about spending amid lingering inflation and higher gasoline prices.
Walmart executives said they expect fuel prices to stay elevated, resulting in an estimated $2 billion in additional fuel-related costs compared with its original guidance. They also acknowledged that higher pump prices were affecting consumer behavior.
“As you go through month by month in the last quarter, you can tell when fuel prices increased and got above $4, perhaps there’s a psychological impact on the choices consumers are making,” Rainey said during Thursday’s call.
“Customers are making tradeoffs. That’s why we lean so heavily into lower prices.”
Walmart said it cut prices on 11,000 items during the quarter, up from 7,200 at the end of the first quarter.
Walmart’s latest results add to a string of mixed quarterly performances from major U.S. retailers in recent days.
Target reported a 3.8 percent increase in quarterly comparable sales, reversing declines from a year earlier. TJX Companies, which owns T.J. Maxx and Marshalls, reported a 4 percent increase in comparable sales, although sales at its flagship U.S. division grew just 1 percent.
Home Depot reported comparable-sales growth of 1.7 percent, while rival Lowe’s posted a more modest 0.2 percent increase.
