Shares of wholesale retail giant Walmart (WMT) fell over 9% on Thursday, sparking concern amongst investors of the stock. Walmart issued its fiscal second-quarter earnings report on Wednesday afternoon, reporting a quarterly increase in sales. However, the investory worry came from how big the increase was. Indeed, Walmart said U.S. comparable sales, those from store and digital channels operating for the past 12 months, rose 2.6%. That is the smallest quarterly increase the retailer has reported since 2020.
Walmart stock’s drop today marks its steepest single-day drop since July 2022. Walmart reported on Thursday that its operating income in the second quarter rose nearly 30% compared to the same time last year, a boost it attributed in part to tariff refunds. At the same time, the company reported the slowest growth in U.S. comparable sales in six years, sending its stock price down 9% in morning trading.
Additionally, Walmart also said U.S. comparable sales grew 2.6%, offset in part by a 0.8% headwind in its health and wellness business as price caps on certain drugs took effect. That was less than the 3.5% increase Wall Street expected, according to data from FactSet. For the third quarter, Walmart said it expects net sales to increase between 3% and 3.75% and adjusted earnings per share to be between 62 cents and 64 cents, which also fell below estimates.
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Walmart’s latest results add to a string of mixed quarterly-sales reports from retailers in recent days. Target said its quarterly comparable sales rose 3.8%, reversing last year’s declines. TJX, which owns chains such as T.J. Maxx and Marshalls, said that its comparable sales rose 4% in the most recent quarter. With back to school season underway, these retailers will likely see a boost in revenue heading into next quarter, which could help WMT stock rebound.
Walmart stock is now down 15% in the last six months and over 7% YTD.
