New Delhi: Walmart reported its slowest quarterly comparable sales growth in six years on 20 August.
It happened as US consumer spending pulled back amid the economic impact of tariffs.
Shares of the company fell as much as 10 per cent. The stock lost more than $90 million in value.
This marked the slowest pace of domestic comparable sales growth in over six years, driven by consumer caution, lower drug prices in health and wellness, and tighter overall spending.
Walmart, the world’s biggest retailer by revenue, is known for its low prices on groceries and essentials.
Also read: Amazon scales up drone delivery as video of cat food package crashing into pool goes viral
Consumer making trade-offs
The slowdown came as shoppers pulled back on spending amid rising gasoline prices.
The retail giant said its pharmacy operations weighed on US sales due to federal negotiations that resulted in lower drug prices.
Walmart cites the impact of a price cap on 10 top-selling pharmaceutical products that took effect on 1 January.
The world’s largest retailer slightly raised its annual sales and profit targets, but said it expects fuel prices to remain steady, leading to an expected $2 billion in incremental fuel-related costs above original guidance.
Walmart said it cut prices on 11,000 items during the quarter, but cautioned that the rollbacks began in July and corresponding sales growth might not show up until next quarter.
“When fuel prices increase and get above $4, perhaps there’s a psychological impact to that … consumers are making trade-offs,” CFO John David Rainey said on Thursday.
(Edited by Ratan Priya)