Walmart said shoppers will get lower prices as the retail giant invests its $2.9 billion tariff refund.
The company said Thursday it was fulfilling the promise made in May, when it first disclosed the estimated refund amount, to direct the bulk of the money into price cuts and customer experience improvements.
"Customers are feeling some pressure, so we're proud of our investments," CEO John Furner said during Walmart's second-quarter earnings call. "We'll do everything we can to keep prices as low as we can for customers throughout the rest of the year."
Walmart's stock price fell roughly 9% after the quarter had the slowest US sales growth in six years. The results fueled wider concerns about the financial condition of US households.
As a whole, Walmart's revenue for the quarter was $187.9 billion, up 5.9% from a year ago. US comparable sales growth was 2.6%, which the company attributed in part to new pharmacy pricing rules and declining consumer sentiment.
CFO John David Rainey said he could see a shift in spending when average gas prices topped $4 per gallon in the US.
"June was a little more obvious as we look at the quarter in terms of customers making tradeoffs, and it's why we have leaned so heavily into lower prices," he said.
Earlier this week, Walmart's competitor Target declined to link its $1 billion tariff refund directly to the price cuts it has made this year.
When asked whether tariff refunds would flow through to consumers, CFO Jim Lee told reporters in a pre-earnings briefing Tuesday that the company is focused on delivering value for shoppers.
Furner and Rainey also said on the call that store-attributed sales will likely soften as customers shift their spending to digital channels where the orders are still mostly fulfilled by store teams. Taken together, Rainey said Walmart stores are selling more items than ever.
Rainey said the majority of tariff refund-based price cuts so far have focused on grocery and general merchandise categories, and Furner added that the discounts will continue to shift throughout the store over time.
"We know customers are looking for a variety of things across the basket at a time," he said.
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Dominick Reuter is a senior retail reporter for Business Insider, primarily covering Walmart, Target, and Costco. His stories tend to focus on issues and trends that affect employees and customers.Prior to joining BI in 2019, Dominick worked for more than a decade as an independent photojournalist covering a wide range of stories for global wire services and newspapers, including Reuters, the Wall Street Journal, and Agence France-Presse.Dominick studied photojournalism at Boston University and later earned a Masters in business and economics journalism from Columbia University.If you're an employee or customer with a story to share, please contact me via email or text/call/Signal at 646-768-4750.
