Walmart beats earnings but U.S. sales growth slows to 2.6%

Walmart shares tumbled more than 9 percent on Thursday, August 20, after the retail giant reported quarterly earnings that beat profit expectations but revealed a sharp slowdown in U.S. store sales growth, raising concerns about consumer spending under the weight of higher energy costs.

The world's largest retailer said U.S. comparable sales rose just 2.6 percent in the fiscal second quarter, the weakest pace since early 2020 and down from 4.1 percent in the first quarter. The slowdown weighed on investor sentiment despite solid top- and bottom-line beats. Adjusted earnings per share came in at $0.81, surpassing the consensus estimate of $0.74, while revenue reached $187.94 billion, above the $186.62 billion analysts had projected. Revenue grew 5.9 percent compared with the same period a year earlier.

Net income for the quarter ending July 31 reached $6.4 billion, boosted significantly by a $2.9 billion tariff refund, the largest reported by any company so far. The refunds stem from a Supreme Court ruling in February that struck down tariffs imposed under the International Emergency Economic Powers Act. The U.S. government had distributed approximately $100 billion in refunds as...