THE WHAT? Walmart Inc. shares dropped after the retailer reported a rare quarterly profit miss, its first in three years, citing higher insurance claims, legal charges, and restructuring costs.
THE DETAILS Second-quarter adjusted earnings per share came in at US$0.68, six cents below Wall Street expectations, sending shares down as much as 4.4% in New York—the steepest decline since May. While profitability was pressured by liability and workers’ compensation claims, overall sales performance was robust. Net sales rose, with comparable-store sales exceeding forecasts, and e-commerce surged 25% on the back of faster delivery demand. Walmart also lifted its full-year sales guidance to 3.75%–4.75%, up from 3%–4%, and slightly raised earnings expectations. CFO John David Rainey highlighted strong traffic, growing market share among higher-income households, and resilient consumer spending, particularly in food and essentials.
THE WHY? The results underscore Walmart’s ability to capture consumer spend and gain share in a challenging retail environment, but also highlight ongoing cost pressures and the reputational impact of missing profit expectations for a retailer of its scale. The company’s investments in e-commerce, value positioning, and supply chain leverage remain central to sustaining growth amid inflationary and trade headwinds.
Source: Bloomberg
