NEW YORK (AP) — Walmart reported another strong performance in the second quarter Thursday, but that was overshadowed by a more cautious outlook for the year. Shares slid 6 per cent before the opening bell. Comparable sales in U.S. stores, those coming from stores open at least a year as well as online sales tied to those locations, rose 2.6 per cent. That followed a 4.1 per cent increase during the first quarter. Excluding the wellness category that includes Walmart’s pharmacies, comparable sales increased 3.4 per cent in the second quarter. Those sales were hit by federal legislation that requires pharmacies to dispense some high-cost Medicare drugs at capped prices, the retailer said. Walmart’s U.S online sales rose 24 per cent, down from 26 per cent in the first quarter. Walmart is among the first batch of major retailers to report second-quarter results, which could offer industry analysts and economists another read on whether ongoing price pressures from the conflict in Iran impacted consumer behavior. Walmart is considered barometer of consumer spending given its vast customer base. More than 150 million customers are on its website or in its stores every week, according to Walmart. That may draw even more attention this quarter after the U.S. data released Friday showed that retail sales were surprisingly weak in July and a new read on consumers from the University of Michigan revealed growing pessimism about the economy with so many American struggling with higher costs for gas, groceries, and just about everything else. That has broadened Walmart’s customer base and the retailer has begun capturing a larger share of wealthier Americans. The biggest gains in market share for Walmart are coming from households with annual income over US$100,000. Walmart’s quarterly net income was US$6.37 billion, or 80 cents per share, in the three-month period ended July 31. Adjusted per share results were 81 cents, easily topping the 74 cents Wall Street had expected, according to FactSet. It also outpaced last year’s US$7.03 billion, or 88 cents per share. Sales rose 5.9 per cent to US$187.94 billion. Analysts were predicting US$186.62 billion, according to FactSet. For the third quarter, Walmart expects earnings per share of 62 cents to 64 cents. It project sales to be up 3 per cent to 3.5 per cent. Analysts were expecting 68 cents per share and sales to reach US$188.19 billion. For the full year, Walmart now expects earnings per share to be in the range of $2.80 to $2.87 while sales should be up anywhere from 4 per cent to 5 per cent. Analysts expected US$2.90 per share and sales of US$752.06 billion for the year, according to FactSet. Anne D’innocenzio, The Associated Press
