Key Takeaways
- Walmart shares plummeted 9% to their lowest point in 2026 following second-quarter results
- Comparable sales in the US increased only 2.6%, marking the weakest growth rate in six years and missing analyst projections of 3.7%
- Transaction basket size expanded by merely 1.1%, a significant drop from last year’s 3.1% growth
- Goldman Sachs reduced its price objective from $141 to $130 while retaining its Buy recommendation
- BofA Securities decreased its target from $144 to $126, also maintaining its Buy stance
Shares of Walmart experienced a sharp 9.2% decline on Thursday, reaching their lowest level in 2026, following the release of second-quarter financial results that revealed a weakening American consumer. The retailer’s stock has now retreated over 20% from its recent high.
While the retail giant exceeded profit projections with adjusted earnings of $0.81 per share versus analyst estimates of $0.74, and delivered revenue of $187.9 billion compared to expectations of $186.75 billion, the market response was decidedly negative. The company even upgraded its full-year outlook, yet investors remained unconvinced.
The critical figure that disappointed the market was comparable store sales performance. When fuel is excluded, these sales advanced only 2.6%, significantly trailing the 3.7% consensus estimate. This represents the weakest comparable sales expansion Walmart has delivered since the pandemic era.
After removing the negative impact from the health and wellness division, comparable sales still registered at 3.4%, falling short of market predictions.
The average ticket size per customer visit increased by just 1.1% during the period, representing a substantial deceleration from the 3.1% growth posted in the prior year. While foot traffic remains steady, shoppers are clearly pulling back on spending per trip.
Health Division Creates Headwinds
A portion of the underperformance stemmed from Walmart’s health and wellness division. Government-mandated drug pricing negotiations contributed a 0.8% drag on comparable sales performance, according to company disclosures.
The retailer announced plans to deploy $2.9 billion in tariff refunds toward maintaining price competitiveness. Management also highlighted an anticipated $2 billion in incremental fuel-related expenses for the fiscal year.
During the first quarter, Walmart had already absorbed a $175 million earnings impact from elevated energy expenses. The latest earnings report amplified these ongoing challenges.
Paul Hickey, an analyst with Bespoke Investment Group, observed that the current report has intensified negative sentiment that initially emerged following first-quarter results.
Analyst Community Adjusts Expectations
Kate McShane, analyst at Goldman Sachs, reduced her price target on WMT from $141 to $130 while maintaining a Buy rating. McShane highlighted the improved second-half guidance, double-digit eCommerce profit margins, and opportunities for market share expansion as supporting factors for her continued optimism.
Goldman’s earnings per share forecast for 2026 decreased approximately 2%, roughly mirroring the stock’s percentage decline.
BofA Securities similarly adjusted its price target downward from $144 to $126 while preserving its Buy recommendation. BofA highlighted the slowdown in domestic comparable sales and observed that Walmart’s elevated valuation multiple amplified the negative market response.
The company has increased its dividend payout for 31 straight years.
Dan Sheehan, director of portfolio management at Telos Family Office, noted that executives characterized consumers as “resilient” while conceding that elevated costs for food and energy are constraining household budgets.
July retail sales across the US contracted 0.6%, sharply underperforming the anticipated 0.1% gain. Goldman Sachs researchers have projected that inflation-adjusted consumer spending growth may decelerate to approximately 1% during the latter half of 2026.
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