By Juveria Tabassum and Nicholas P. Brown
Aug 20 (Reuters) - Walmart missed Wall Street expectations for quarterly comparable sales as shoppers pulled back on spending in the face of rising gas prices.
The world's largest retailer, however, slightly raised its annual targets for the first time this year, with CEO John Furner pointing to growth in its ecommerce division.
The results offer a key read on the retail bellwether's ability to attract price-sensitive shoppers, who are prioritizing groceries
and other essentials over discretionary spending ahead of the back-to-school and holiday seasons.
The company's quarterly U.S. same-store sales rose 2.6%, compared with estimates of a 3.8% increase, according to data compiled by LSEG.
Average ticket, or spending per transaction, grew 1.1%, in line with the first quarter, but well below a 3.1% rise in the second quarter of 2026.
The company now expects fiscal 2027 net sales to grow between 4% and 5%, compared with its earlier target of growth between 3.5% and 4.5%.
Comparable sales in its health and wellness category were down in the low-single digits, hurt by a 900-basis-point impact from the maximum fair price implementation under the Inflation Reduction Act.
Excluding the impact from the act, Walmart said its core U.S. comparable sales grew 3.4%.
Walmart has lowered prices on more than 7,000 items this year, supporting margins through lucrative side businesses like advertising and a growing third-party marketplace.
Walmart Connect, the U.S. advertising business, grew 43%, while its e-commerce sales increased 24%.
Walmart said on Thursday that it would continue to direct its tariff refunds received into lowering prices. Its adjusted operating income included 750 basis points benefit from tariff refunds.
Average transactions were up 1.5%, compared with 3% growth in the first quarter.
It reported mid-single-digit growth in grocery, which is its biggest merchandising category. General merchandise, which includes toys and apparel, was up in low-single digits.
On Wednesday, retailer Target raised its annual forecasts for a second time this year, reaping early rewards from its turnaround effort after several years of ground loss driven by merchandising and other missteps.
Walmart now expects annual adjusted earnings per share between $2.80 and $2.87, compared with its earlier target of $2.75 to $2.85.
It expects third-quarter adjusted earnings per share of between 62 cents and 64 cents, below estimates of 68 cents.
Walmart expects third-quarter net sales to grow between 3% and 3.75%, also slower than estimates of 4.9% growth.
(Reporting by Juveria Tabassum in Bengaluru; Editing by Anil D'Silva)
