Walmart did almost everything Wall Street asked of it on Thursday morning. Revenue of $187.9 billion beat the roughly $186 billion consensus. Adjusted earnings of $0.81 per share beat the $0.74 estimate by nearly 10%. Global e-commerce grew 23%. Operating income rose 28.8%. Management raised full-year sales and operating income guidance.
The stock closed down 9.79% at $103.11 — its worst single day since July 2022, and roughly $65 billion of market value erased in one session.
Two numbers explain the disconnect, and neither of them is on the headline line of the press release.
2.6%
Walmart U.S. comparable sales grew 2.6% in the quarter. Analysts were looking for roughly 3.7%. A year ago the same figure was 4.6%. This was the slowest pace of U.S. comp growth Walmart has posted since the fourth quarter of 2020.
The company has an explanation, and it is a real one: cheaper prescription drug prices, tied to legislation allowing Medicare to negotiate directly, dragged the number down by about 80 basis points. Excluding health and wellness, core merchandise comps grew 3.4%. Sam's Club comps grew 4.4%, down from 5.9%.
But 3.4% ex-drugs is still a deceleration, and the composition matters more than the headline. General merchandise like-for-like inflation ran just 1.7%. Global inventory was up 6.7%. E-commerce grew 23% while store sales lagged. What that describes is a company shifting volume online and holding share by cutting price — which is exactly what it said it would do.
$2.9 Billion
Walmart disclosed $2.9 billion in tariff refunds from the IEEPA ruling. Its gross profit rate rose 96 basis points to 25.4%, and adjusted operating income growth of roughly 17% in constant currency included a 750-basis-point net benefit from those refunds. Strip the refunds out and underlying operating income growth was at the top end of the company's 7–10% guidance range.
Walmart is not banking that money. It said the refunds will be reinvested into customer pricing in the back half — which is why the same disclosure that flattered this quarter's margin is a headwind for the next one.
You saw the same footnote across every retail report this week. Target's second-quarter EPS doubled to $4.11, but $1.65 of that came from a $994 million pretax refund; ex-refund growth was 20%, not 100%. TJX booked $331 million in refunds for a $219 million net benefit. Lowe's had $0.11 of refund inside adjusted EPS of $4.40 — and still cut its full-year outlook to the low end of every range. Home Depot's best comparable-sales quarter in four years came with its own CFO calling housing conditions "frozen."
Five of the largest retailers in America reported inside four days. Every one of them had a check from Washington inside the numbers.
The Guidance Is What Broke It
Walmart raised the year and cut the quarter. That combination is what actually moved the stock.
Full year FY27: consolidated net sales growth of 4–5% in constant currency, up from 3.5–4.5%.
Q3: net sales growth of 3–3.75% in constant currency, operating income up 2–4%, adjusted EPS of $0.62–$0.64 against a $0.68 consensus.
The stated reason: a timing shift in Flipkart's Big Billion Days sale between the third and fourth quarters, worth more than 100 basis points of Q3 sales growth.
CFO John David Rainey asked investors to judge the second and third quarters together because of that shift. Walmart International net sales grew 12.8% to $35.2 billion, its e-commerce grew 19%, and its advertising business grew 20%, led by Flipkart Ads.
A timing shift is a legitimate explanation. It is also the kind of explanation that a market pricing a stock for perfection does not want to hear in the same sentence as a five-year low in domestic comps.
The Bond Market Took Wednesday Back
Wednesday's rally was built on one thing: Treasury doubling the size of its buyback operations for longer-dated debt. The 30-year yield dropped hard, and stocks, gold and crypto all caught a bid.
Thursday it unwound. The 10-year climbed back above 4.69% and the 30-year moved back above 5.23%, close to the 5.33% it touched Tuesday — the highest since June 2007. Rate-sensitive stocks reversed with it, and Walmart's decline dragged the Dow.
Every major index closed lower. The S&P 500 fell 0.85% to 7,642.69. The Dow dropped 681 points, or 1.31%, to 52,762.30 — the worst of the majors, a rare session in which old-economy names fell harder than tech. The Nasdaq Composite lost 1.00% to 26,067.81. The Russell 2000 fell 1.36% to 2,992.35, closing back below 3,000 for the first time since July. Volatility rose more than 7%.
The economic data did not help the case for lower rates:
Initial jobless claims fell to 206,000 for the week ended August 15, down 6,000, with the four-week average at 204,000. Continuing claims rose to 1.799 million.
The Philadelphia Fed manufacturing index jumped to 47.4 in August from 41.4. Economists expected a decline to 24.8. The reading came in at nearly twice the forecast.
The July FOMC minutes, released Wednesday, showed three presidents dissenting for a 25-basis-point hike and "several participants" favoring one, with the outlook called "highly uncertain" and inflation risks tilted up.
Strong manufacturing, stable claims and a committee already arguing about hikes is not the mix that produces a September cut. Markets have hike-or-hold odds for the September 16 meeting close to even.
Oil added to the pressure. Brent settled at $93.49, up 2.04% after touching $94.71 intraday, and WTI settled at $86.62, up 2.64% — three-week highs and a fifth consecutive session of gains, after the UAE suspended all financial and economic transactions with Iran. Roughly one-fifth of global consumption moved through the Strait of Hormuz before the war began on February 28; flows remain far below that. U.S. distillate stockpiles fell for a third straight week even as crude inventories rose 4.4 million barrels.
The Part Nobody Priced
Marvell disclosed on Wednesday that it won a contract to design AI accelerator chips for Google, the first official confirmation of a project the industry had been calling "Frozen v2." The shares jumped as much as 9.8%. Attached to the deal is a warrant letting Google buy about 59 million Marvell shares at $206.58 — roughly $12.2 billion worth, with $960 million vesting over the next year and the rest in 240 tranches through fiscal 2033.
That structure is becoming the template. Nvidia has effectively become the bank of the AI buildout, financing the customers who buy its chips; now a customer is taking equity in its supplier. Broadcom, which has supplied Google's TPUs since 2016 and signed an accelerator deal running through 2031, now shares the account.
What Lands Next
Jackson Hole runs August 27–29, with Fed Chair Kevin Warsh delivering his first keynote as chair on the 28th. He has curtailed forward guidance at every opportunity since taking office in May, shortened the post-meeting statement and told reporters explicitly that the Fed is not constrained by market pricing. The symposium's official theme is financial innovation in payments — not policy.
Which means the more useful signal is probably the one already on the record: roughly half the committee penciled in hikes in June, and three regional presidents dissented for one in July. That is an unusual level of internal disagreement this early in a chair's tenure, and there are 19 days between the last day at Jackson Hole and the September 16 decision.
For retail, the read-through from this week is narrower than the headlines suggest. Traffic is holding. Pricing is doing the work. And for one or two more quarters, a court ruling in Washington is paying part of the bill.
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