Key facts
- Walmart's U.S. comparable sales rose 2.6%, missing estimates of 3.8%.
- Average spending per transaction grew 1.1%, a slowdown from previous periods.
- The company raised its annual sales growth forecast to 4%-5% and adjusted EPS to $2.80-$2.87.
- Walmart's advertising and e-commerce divisions showed strong growth.
- Third-quarter earnings per share are projected to be below analyst expectations.
Walmart reported a rare miss on U.S. comparable sales for its latest quarter, as consumers scaled back spending amid rising gas prices and economic uncertainty. The retail giant's U.S. same-store sales increased by 2.6%, falling short of the 3.8% expected by Wall Street analysts. Average spending per transaction grew 1.1%, a slowdown compared to previous periods.
Despite the sales miss, Walmart slightly raised its annual targets for the first time this year. CEO John Furner highlighted growth in the company's e-commerce division and its advertising business, Walmart Connect, which saw a 43% increase. E-commerce sales overall grew by 24%.
The company now expects fiscal 2027 net sales to grow between 4% and 5%, an increase from its previous target of 3.5% to 4.5%. Annual adjusted earnings per share are projected to be between $2.80 and $2.87, up from the prior range of $2.75 to $2.85.
However, Walmart anticipates third-quarter adjusted earnings per share to be between 62 cents and 64 cents, below the estimated 68 cents. Third-quarter net sales are projected to grow between 3% and 3.75%, also lower than the estimated 4.9% growth.
Comparable sales in Walmart's health and wellness category were down, impacted by the Inflation Reduction Act. Excluding this effect, core U.S. comparable sales grew 3.4%. The company has focused on lowering prices for over 7,000 items this year, supported by its advertising and third-party marketplace businesses.