Walmart's slowest US comparable sales in five years knock the shares

Walmart said US comparable sales — sales at stores open at least a year — grew 2.6% in its second quarter. That is the slowest pace in more than five years, and it counts as a rare miss for a retailer that has spent the past two years beating expectations. The shares slid on the 20 August session. Two things sit behind the number. Falling prices for prescription drugs cut into the dollar value of pharmacy sales, which are a large and growing part of Walmart's US business. Separately, shoppers pulled back on spending. Price declines flatter unit volumes but hurt the headline sales figure, so a soft comparable number does not automatically mean fewer customers walked in. What is unresolved is which of the two effects dominates. If drug deflation is doing most of the work, the pressure fades once prices stabilise. If households are genuinely trading down, the read extends well beyond Walmart to the rest of US retail, since Walmart is normally the share gainer when budgets tighten.