Walmart Drops 8% After 4.1% Sales Gain as Deal-Seeking Shoppers Alarm Investors

6 articles · Updated · The New York Times · May 21

Walmart shares fell nearly 8% Thursday even after the retailer posted solid quarterly growth, with Target and TJX also hit as investors questioned how durable consumer spending will be.
4.1% same-store sales growth at Walmart’s U.S. business was driven by more visits and higher spending per trip, but the pace slowed from prior quarters and reflected shoppers’ growing focus on cheaper options.
Value was the common theme across chains: McDonald’s said value meals lifted sales, Target cut prices on thousands of items, and Walmart said private-label goods and higher-income customers trading down fueled demand.
About 5% operating-profit growth at Walmart would have been stronger without higher fuel costs, which the company said it mostly absorbed rather than pass on as the war with Iran pushes up prices broadly.
The results suggest Americans are still spending, but increasingly only when retailers offer discounts—an emerging warning sign for the broader U.S. economy later this year.

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