Walmart stock drops 9% as sales growth slows, customers make 'trade-offs' amid high fuel costs - Yahoo Finance

Walmart shares fell 9% despite beating Wall Street estimates on revenue and earnings, as US same-store sales growth disappointed investors.
Revenue rose nearly 6% to $187.9 billion, above the roughly $186 billion expected, while adjusted earnings reached $0.81 per share versus the $0.74 forecast, prompting the retailer to raise its full-year outlook.
US same-store sales grew just 2.6%, well below the 3.7% expected and the slowest pace since Q4 2020, dragged down partly by lower drug prices tied to Medicare's maximum fair price legislation; excluding health and wellness, core merchandise sales grew 3.4%.
CFO John David Rainey said consumers made "trade-offs" during the quarter, noting an apparent psychological impact when fuel prices rose above $4, with June showing the most obvious pullback; both traffic and ticket sizes came in below expectations.
E-commerce sales climbed 23% overall and 24% in the US, exceeding forecasts, likely aided by promotions timed to compete with Amazon's Prime Day, while grocery posted mid-single-digit growth led by personal care, beauty, and pet supplies.
Operating income grew about 21% year over year and gross profit rose 158 basis points, helped by a tariff refund benefit but partially offset by price investments—including cuts on beef, chips, and soda—and higher fuel costs.