Walmart just delivered one of the clearest signals yet that American consumers are becoming more cautious.

U.S. comparable sales rose 2.6% in the latest quarter, the weakest increase in six years and sharply below the 4.1% growth Walmart posted in the previous quarter. Wall Street had expected roughly 3.8%.

The last time Walmart’s comparable U.S. sales grew more slowly was the quarter ending January 2020, when the increase was 1.9%.

That matters because Walmart sees more than 150 million customers each week and sells everything from groceries and prescriptions to televisions and clothing. When spending patterns change there, they often say something broader about the American household.

Consumers are still buying necessities. Grocery volumes remained relatively strong, but discretionary spending is under more pressure as higher gasoline and everyday living costs eat into household budgets.

The weakness was also partly technical. New federal rules limiting prices on certain high-cost Medicare drugs reduced pharmacy revenue. Excluding Walmart’s health-and-wellness business, comparable sales would have risen 3.4% — better, but still below expectations.

Online shopping remains the bright spot. Walmart’s U.S. e-commerce sales climbed 24%, although that too slowed from 26% in the previous quarter.

Overall company revenue rose 5.9% to $187.94 billion, and quarterly net income reached $6.37 billion. Walmart also slightly raised its full-year sales and profit outlook, helped by growth in e-commerce and its highly profitable advertising business.

But the consumer message inside the numbers was difficult to miss.

Walmart has already cut prices on more than 7,000 items, and the retailer says it plans to use much of a multibillion-dollar tariff refund to hold down or reduce prices through the end of the year.

That is an unusually aggressive move for a company that already competes primarily on price.

Walmart shares fell about 6% in premarket trading after the report, as investors focused on the sales slowdown and cautious outlook for the coming quarter.

The company still expects to grow this year. What changed is the speed.

For six years, Walmart managed to keep comparable sales growing faster than this. Now even the country’s largest retailer — and one of the biggest beneficiaries when consumers trade down — is seeing shoppers become more selective.

JBizNews Desk | Bentonville, Arkansas

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