Walmart’s shares slide despite upbeat sales

Today’s headlines

What’s happening: Shares of Walmart fell on Thursday after the company released its second-quarter results.

What happened: The retail giant reported better-than-expected sales for the second quarter.

However, Walmart failed to meet earnings expectations, which weighed on the stock.

How were the results: The Bentonville, Arkansas-based company reported single-digit sales growth for the second quarter.

• Sales rose 4.8% year-over-year to $177.40 billion, topping consensus estimates of $176.16 billion.
• Total revenues, on a constant currency basis, jumped 5.6%.
• Adjusted earnings came in at 68 cents per share, missing Wall Street expectations of 74 cents per share.

Why it matters: Overall consumer sentiment has recently weakened due to concerns over higher tariffs fuelling inflation, weighing on profits of retailers.

Walmart’s sales remained resilient with the company continuing to benefit from rising price sensitivity among US customers and a boost from digital sales.

Walmart reported that its US comparable sales, excluding fuel, rose 4.6% during the quarter, while Sam’s Club US comparable sales, excluding fuel, surged 5.9%.

Global ecommerce sales jumped 25%, led by store-based pickup and growth in marketplace and delivery services.

CEO Doug McMillon said that the company had kept prices low despite tariff-related cost pressures. McMillon indicated that costs had been rising every week, as inventory gets replenished at tariff-adjusted prices. He added that this trend could continue over the next couple of quarters.

Walmart’s gross margins missed expectations. US gross margins expanded by 26 basis points, while overall gross margins came in around flat at 24.5%, missing market estimates of 24.9%.

Management raised their revenue growth forecast for fiscal 2026 to 3.75%-4.75%. They also raised their adjusted earnings guidance to $2.52–$2.62 per share, from the previous outlook of $2.50–$2.60 per share.

For the third quarter, Walmart guided to adjusted earnings of 58-60 cents per share, higher than market estimates of 57 cents per share. The company warned of a headwind to earnings from the VIZIO acquisition.

How shares responded: Walmart’s shares fell 4.5% to close at $97.96 on Thursday, following the release of quarterly results. The stock has gained around 9% year to date.

What to watch: Investors will continue monitoring tariff-related announcements from Trump and data on consumer sentiment.

The markets today

The Canadian dollar in focus today ahead of some major economic reports

Context: The CAD/USD forex pair edged higher this morning, as investors digested the latest economic data.

Details: Data released on Thursday showed Canada’s industrial producer prices surged 0.7% in July, following a 0.5% rise in the previous month. The figure also came in higher than market estimates of 0.3%. Canada’s Raw Materials Price Index climbed 0.3% in July, easing from 2.7% in the previous month.

Canada’s CFIB Business Barometer long-term index declined 3.7 points to a reading of 47.8 in August, snapping a four-month climb toward the 50 level.

Trimmed-Mean inflation has remained above the 3% mark for the fourth straight month in July, signalling that the Bank of Canada may hold rates rather than lowering them soon.

Weakness in the US dollar lent support to the CAD/USD forex pair this morning. The US dollar index, which measures the greenback’s performance versus a basket of major peers, slipped to 98.61.

However, lower prices of crude oil, one of Canada’s major exports, weighed on the loonie. WTI crude oil prices slipped around 0.1% to $63.49 this morning.

The CAD/USD pair rose around 0.1% to 1.3903 this morning.

What to watch: Investors await the release of data on Canada’s retail sales (1630 UAE Time) and manufacturing sales (1630 UAE Time) today. Retail sales in Canada, which rose 4.9% year-over-year in May, are expected to surge by 5.3% in June. Canada’s manufacturing sales, which grew by 0.3% to C$68.5 billion in June, are projected to rise by 0.1% in July.

Markets will also continue monitoring ongoing talks between the US and Russia related to Ukraine.

Other Markets: US trading indices closed lower on Thursday, with the Dow Jones index, S&P 500 and the Nasdaq 100 down by 0.34%, 0.40% and 0.46%, respectively.

The news shaping the markets

Russia said that Ukraine was “not interested” in a long-term peace deal. The news sent the RUB/USD pair slightly higher in forex trading this morning.

Argentina’s retail sales rose by 27.8% year-over-year in June, following a 45.1% surge in the previous month, which lent support to the ARS/USD forex pair.

South Africa’s value of building plans approved declined by 13.3% year-over-year to R7,496 million in June, compared to a 13.2% surge in the previous month, which sent the ZAR/USD pair lower in forex trading this morning.

Mexico’s retail sales climbed by 2.5% year-over-year, easing from 2.7% growth in May. On a monthly basis, real income from goods and services declined 0.4%, which exerted pressure on the MXN/USD forex pair.

UK’s total order book balance fell to -33 in August, from -30 in the previous month. However, the GBP/USD pair rose in forex trading this morning.

What else to watch today

Turkey’s tourist arrivals (1200 UAE Time), India’s foreign exchange reserves (1530 UAE Time), Mexico’s economic activity (1600 UAE Time), GDP growth rate (1600 UAE Time), and mid-month inflation rate (1600 UAE Time), Canada’s senior loan officer survey (1830 UAE Time), as well as US Baker Hughes oil rig count (2100 UAE Time) and Baker Hughes total rigs count (2100 UAE Time).