Walmart Shares Plummet 9% Amid 'Worst-Case Scenario' Earnings Results
Walmart (NYSE: WMT) suffered a nearly 9% drop in share price on August 20 after releasing mixed quarterly earnings results. Analyst David Bellinger from Mizuho Financial Group called the quarter a 'worst-case scenario' and stated that the company's performance had not fallen this far short of expectations in years.
Walmart reported $6.4 billion in net income for the quarter ending July 31, exceeding analyst forecasts with adjusted earnings of 81 cents per share. Revenue climbed 5.9% to $187.9 billion, but U.S. same-store sales growth came in at a weak 2.6%, excluding fuel, which is its weakest reading since early 2020.
Chief Financial Officer John David Rainey attributed the slowdown in consumer spending to rising gas prices and inflation, currently running at 3.4%. Walmart's sluggish same-store sales figure was also partially shaped by declining pharmacy revenues due to lower prescription drug prices.
Despite the share selloff, Walmart raised its full-year outlook, projecting sales growth of 4% to 5% and adjusted earnings of $2.80 to $2.87 per share. Analysts offered varying views on the impact of Walmart's performance, with some warning that a slowdown at a central retailer raises questions about consumer spending health.