Walmart shares tumbled 9.2% on Thursday despite the retail giant beating Wall Street expectations for fiscal second-quarter sales and raising its full-year outlook, as investors focused on weaker-than-expected comparable sales and cautious quarterly guidance.
Walmart reported adjusted earnings per share of 81 cents, ahead of the 74 cents expected, while revenue reached $187.94 billion, compared with the $186.62 billion forecast.
John Furner, President and CEO, noted in the release: "Our team delivered another good quarter, and we continue to make steady progress on the long-term value drivers of our business.
"Our multi-year growth in eCommerce is evidence that customers are choosing Walmart because we deliver price, speed, and convenience across a broad assortment.
Walmart's revenue rose 5.9% in the fiscal second quarter, while global e-commerce sales jumped 23%.
U.S. comparable sales increased 2.6%, although that was partly offset by a 0.8% headwind in its health and wellness business after price caps on certain drugs took effect.
The comparable-sales result fell short of the 3.5% increase expected by Wall Street, according to FactSet.
For the third quarter, Walmart expects net sales to increase between 3% and 3.75%, while adjusted earnings per share are forecast at between 62 cents and 64 cents.
The retailer raised its full-year sales outlook, now expecting net sales growth of between 4% and 5%, compared with its previous forecast of 3.5% to 4.5%.
Adjusted earnings are expected to range between $2.80 and $2.87 per share, up from previous guidance of $2.75 to $2.85 per share.
Walmart's efforts to keep prices low come as consumers cut back on discretionary spending amid higher fuel and food costs. The retailer is typically viewed as relatively well positioned during periods of weaker consumer demand because of its value proposition and scale as the largest U.S. retailer.
For the three months ended 31 July, Walmart reported net income of $6.37 billion, or 80 cents per share, compared with $7.03 billion, or 88 cents per share, a year earlier.
Excluding the impact of an investment loss and including a benefit from a tax matter, adjusted earnings per share came to 81 cents.
The company's gross profit margin rose to 25.4%, helped by the benefit from tariff refunds.
Total revenue increased to $187.94 billion from $177.40 billion in the year-earlier period.
Global advertising revenue also rose 38%.
In the U.S., Walmart reported net sales of $125.2 billion, compared with $120.9 billion a year earlier. International sales reached $35.2 billion, up from $31.2 billion in the year-ago period.
Global inventory increased 6.7% during the quarter.
Walmart has a market capitalisation of $826.37 billion.
