Walmart (NASDAQ:WMT), the global discount retail giant, closed at $103.84, down 9.15%. Fiscal second-quarter results showed slower U.S. comparable sales growth, and investors are scrutinizing forward guidance and consumer demand.
Trading volume reached 83.1 million shares, coming in about 234% above its three-month average of 24.9 million shares.
How the markets moved today
The S&P 500 (SNPINDEX:^GSPC) fell 0.85% to 7,642, while the Nasdaq Composite (NASDAQINDEX:^IXIC) declined 1.00% to 26,067. Among discount stores and warehouse clubs, omnichannel mass retail peers, Target (NYSE:TGT) slipped 0.47% to $158.25 and Costco Wholesale (NASDAQ:COST) fell 2.45% to $933.51.
What this means for investors
Walmart had a strong quarter, with revenue up 5.1% on a constant-currency basis, and the company raised full-year guidance. But there were some less-than-stellar signs under the hood.
The core business remains strong, with management saying consumers continue to spend despite some visible stress. High fuel prices are causing consumers to make trade-offs.
Same store U.S. sales (excluding fuel) rose 2.6% versus expectations of 3.5% and compared to 4.6% last year. One challenge was the health and wellness sector, where sales dropped by nearly 1%. The company's increase in earnings per share (EPS) guidance was partly due to a nearly $3 billion tariff refund.
The reaction from investors seems overblown, however. Macroeconomic challenges will ebb and flow. Walmart stock has now dropped by nearly 7% year to date. That looks like a good opportunity for long-term investors.
Howard Smith has positions in Target. The Motley Fool has positions in and recommends Costco Wholesale, Target, and Walmart. The Motley Fool has a disclosure policy.