Walmart shares tumble 9% despite earnings beat as US shoppers pull back

Walmart reported second-quarter profit and sales that beat Wall Street's forecasts on Thursday, yet its shares closed down 9.15% at $103.84, wiping roughly $80 billion from its market value in a single session and pulling the retailer's valuation below the $1 trillion mark for the first time since the spring. The sell-off, among the steepest one-day moves for the stock in years, came as investors focused less on the headline beat than on a sharp slowdown in United States comparable sales and a subdued outlook for the current quarter.

The reaction underscored how closely Walmart's results are now read as a bellwether for the American consumer. As the country's largest private employer and largest retailer, the company's commentary on spending patterns carries weight well beyond its own stock, and Thursday's numbers suggested households are becoming more selective even as overall demand holds up.

The numbers

According to the earnings release published on Walmart's corporate newsroom, total revenue for the quarter ended July 31 rose 5.9% to $187.9 billion, ahead of the roughly $186.8 billion analysts had penciled in. Adjusted earnings per share came in at 81 cents, above the 74-cent consensus estimate, while GAAP net income fell to $6.37 billion, or 80 cents a share, from $7.03 billion a year earlier. The company also disclosed the results in a Form 8-K filed with the Securities and Exchange Commission, with the underlying figures set out in an accompanying earnings release exhibit.

The soft spot was comparable sales. Walmart U.S. same-store sales, excluding fuel, grew 2.6%, its slowest pace in years and well short of the roughly 3.7% to 3.8% growth analysts had modeled. Sam's Club U.S. comparable sales fared better, up 4.4%. Global e-commerce sales climbed 23%, with Walmart U.S. online sales up 24% and marketplace net sales growing more than 50%, while the company's advertising business, Walmart Connect, grew 38% globally. Trading volume on Thursday reached about 83 million shares, roughly 234% above the stock's three-month average, a sign of how forcefully investors repriced the shares.

Management raised full-year adjusted earnings guidance to a range of $2.80 to $2.87 a share and said underlying operating income growth, stripped of one-time tariff refunds, was tracking to the top end of its 7% to 10% target. But the third-quarter outlook disappointed: Walmart guided to adjusted earnings of 62 to 64 cents a share, roughly flat year over year, and net sales growth of just 3.0% to 3.75% in constant currency, partly reflecting a timing shift in its Flipkart unit's Big Billion Days promotional event in India.

How we got here

Walmart's results arrived in the middle of a retail earnings week that had already flashed warning signs about the health of American consumer spending. Home Depot and Target both reported results earlier in the week that showed shoppers pulling back on discretionary categories even as they kept spending on essentials, a pattern consistent with what Walmart described on its earnings call. Home Depot's comparable sales rose 1.7% on revenue of $47.9 billion, edging past estimates but still reflecting a subdued home-renovation market, while Target's own report drew a mixed reception from analysts despite topping Wall Street's targets. Taken together, the week's releases pointed to a consumer that is still spending but increasingly weighing where to cut back.

Elevated fuel prices have added to the strain on household budgets. Walmart executives said they expect more than $2 billion in additional costs this year tied to higher pump prices, even as the company also disclosed it was eligible for close to $2.9 billion in tariff-related refunds, funds it says it plans to funnel into lower prices for customers, with the effect expected to show up more clearly in the third quarter. The dynamic illustrates the balancing act facing large retailers: absorbing higher input costs while trying not to alienate price-sensitive shoppers who have grown accustomed, over several years of elevated inflation, to hunting for the best deal across chains.

The results were also the first major test for John Furner, who became Walmart's president and chief executive on February 1, 2026, succeeding longtime chief executive Doug McMillon. Furner spent more than three decades at Walmart, starting as an hourly associate in Bentonville, Arkansas, before running Sam's Club and then Walmart's US business, and Thursday's numbers were an early signal of how his tenure will be judged by investors accustomed to Walmart's steady post-pandemic growth.

Who is affected

The slowdown in comparable sales growth touches a wide set of stakeholders. For Walmart's roughly 2.1 million associates worldwide, continued top-line growth, even if decelerating, points to stability rather than retrenchment, but a softer third-quarter guide raises the bar for holiday-season hiring and bonus pools. For competing retailers, Walmart's commentary on trade-down behavior, with shoppers favoring value tiers and private-label goods, suggests pressure will likely show up in other chains' results this autumn. And for the broader economy, Walmart's numbers landed just as the Federal Reserve is weighing the future path of interest rates, giving policymakers one more data point on whether consumer resilience is beginning to crack.

• Total revenue: $187.9 billion, up 5.9% year over year
• Adjusted EPS: 81 cents, versus a 74-cent consensus estimate
• US comparable sales: up 2.6%, the slowest pace in years
• Shares: down 9.15% to $103.84, market value below $1 trillion

Reaction

Executives framed the quarter as evidence of a cautious but still-spending consumer. Chief executive John Furner said in the earnings release that "customers tell us they're still feeling some pressure," adding that "having the best prices across a basket of goods helps us continue to build trust with our customers and members by helping them save money at a time when many households are carefully managing their budgets."

"You can tell when fuel prices increased and got above $4, and perhaps there's a psychological impact to that, that there are choices that consumers are making," chief financial officer John David Rainey told analysts on the earnings call, adding that "the fact that we've got more elevated brands, more expensive merchandise that appeal to a broader cohort of customers is affecting our business."

Wall Street's response was to focus on the guidance rather than the beat. Several analysts noted that this marked the second time in four quarters that Walmart topped earnings estimates only to see the stock fall sharply, a pattern some attributed to the shares trading at a rich multiple heading into the print, leaving little room for anything short of an unambiguously strong outlook. The size of the reaction, nearly ten times the stock's typical one-day move, reflected how sensitive investors have become to any sign that the highest-income and most price-conscious shoppers alike are moderating spending.

What happens next

Walmart's leadership pointed to the tariff refunds as a lever it can pull to defend market share heading into the holidays, with price cuts expected to become more visible in the third quarter. The company reiterated it expects underlying momentum in e-commerce, advertising and membership fee income, up 17% globally, to keep offsetting slower store traffic growth. Investors will get another read on consumer health when Walmart reports third-quarter results in November, and sooner than that from other large retailers still to report this earnings season. The results also add to the data the Federal Reserve will weigh as it considers the path for interest rates in the coming months, with policymakers due to gather at the Kansas City Fed's annual symposium in Jackson Hole, Wyoming, later this month.