Walmart had its slowest sales growth since 2020

Retail giant Walmart’s stock plummeted on Thursday after it reported its slowest growth in six years, with US comparable sales rising just 2.6%—below analyst estimates of 3.8%.

The retail giant’s shares tumbled 9.2% yesterday on the news, though weakness in its health and wellness business following new drug price caps, including on GLP-1s, also contributed.

The big box retailer’s status as an economic bellwether has economists asking whether consumer spending is finally losing steam.

What’s happening?
CFO John David Rainey told investors the slowdown stems from shifting consumer habits, driven by gasoline prices and broader economic pressure.

Lower-income consumers pulled back on spending as gas prices rose, though Walmart gained ground with households making $100,000-plus. Meanwhile, wage growth has slowed, and consumer sentiment has weakened this month.

To ease pressure on shoppers, the retailer is using its $2.9 billion tariff refund to cut prices on essentials like beef and school supplies.

Silver lining
Despite a drop in sales, its e-commerce business jumped 24% in Q2, boosted by advertising revenue.

CEO David Guggina said sales of education supplies remained strong. Walmart sells 50% of all US back-to-school items.

Overall net sales rose 5.9% to $186.1 billion, while net income fell 9.4% to $6.37 billion.

Walmart raised its full-year outlook, now projecting net sales growth of 4% to 5%.

Walmart isn’t alone; government data shows that US retail sales were down 0.6% in July compared with June.