Walmart Reports Slowest Quarterly Sales Growth in Six Years Amid Rising Fuel Costs

Walmart reported its slowest quarterly comparable sales growth in six years on Thursday, with US same-store sales rising 2.6 percent. This figure fell short of the 3.8 percent forecast by analysts at LSEG. The company attributed the slowdown to high fuel prices, which CFO John David Rainey stated create a psychological impact that drives consumers to make trade-offs when prices exceed 4 dollars per gallon. Walmart expects to incur 2 billion dollars in incremental fuel-related costs above its original guidance.

Despite the sales slump, Walmart upgraded its forecast for net sales growth to between 4 and 5 percent, up from a previous range of 3.5 to 4.5 percent. The company also announced price cuts on 11,000 items, supported in part by 2.9 billion dollars in one-time tariff refunds. While e-commerce sales jumped 24 percent in the US, foot traffic in brick and mortar stores slowed to 1.5 percent from 3 percent in the previous quarter. Spending per transaction grew 1.1 percent, a decrease from the 3.1 percent jump seen a year earlier.

Market reactions were sharp, with shares falling as much as 10 percent to a nine-month low of 102.85 dollars. This decline followed reports that US retail sales dipped 0.6 percent in July. The company noted that its pharmacy business also experienced a dip in sales, which a center-right source attributed to lower prices negotiated under the Inflation Reduction Act.

Outlets with different political leanings framed the event differently. A center-left source focused on the broader economic pressures on the consumer, citing inflation and tensions with Iran as weighing factors. In contrast, a center-right source framed the report as a rare stumble for the retailer and a potential signal that the tailwind of consumers trading down to cheaper stores may be fading.