Walmart sees sales drop as US consumer spending retreats

Walmart experienced a slowdown in US sales growth during its second quarter, with same-store sales rising only 2.6 percent, the slowest increase in six years. This pullback in consumer spending is attributed by the company's CFO to fuel prices exceeding $4 per gallon, leading consumers to make spending trade-offs. The retailer also reported higher fuel-related costs and a dip in its pharmacy business. Despite a 24 percent increase in US e-commerce sales, overall foot traffic into brick-and-mortar stores saw a smaller increase compared to the previous quarter. Walmart announced price cuts on 11,000 items, partly funded by tariff refunds, but their impact may be seen in future earnings reports.

Walmart reported a strong second quarter with U.S. comparable sales up 2.6% and online sales increasing 24%. Net income was $6.37 billion, or 80 cents per share, exceeding analyst expectations. Despite this performance, Walmart issued a more cautious outlook for the full year, projecting earnings per share between $2.80 and $2.87, which is below analyst forecasts. The company noted that federal legislation impacting pharmacy reimbursements affected comparable sales. Walmart is experiencing growth in market share among higher-income households. The company's results are being closely watched as an indicator of consumer spending amidst economic pressures.