Walmart raises annual targets - pharmaceutical sales weigh on US business

Bentonville - Walmart, the world's largest retailer, benefited from strong growth in its advertising revenue, a thriving online business and customs duty refunds from the US government during its second fiscal quarter.

CEO John Furner raised his forecasts for the financial year ending January 2027, according to a statement on Thursday. The important US business, however, was disappointing. The share price fell by almost six percent in pre-market trading.

Management now expects a sales increase of 4 to 5 percent at constant exchange rates compared to the previous year.

In the second quarter, sales on this basis climbed by 5.1 percent. At actual exchange rates, the increase was almost 6 percent, reaching 187.9 billion dollars.

The US business, excluding petrol station revenues, fell short of market expectations on a like-for-like basis with an increase of 2.6 percent. According to Walmart, its pharmacy business weighed on US revenues after negotiations with the US government led to lower drug prices.

The group also earned significantly more than a year ago, thanks to first-time customs duty refunds. Even without special effects, the adjusted operating result rose by 17.4 percent to nine point two billion dollars on a currency-adjusted basis, the company stated.

For the full financial year, this key figure is now expected to increase by 7 to 8.5 percent at constant exchange rates, according to the new forecast. The refunds are intended to benefit consumers through price reductions.

The bottom-line profit, however, fell by 9.4 percent to six point four billion dollars, after the group had benefited from a very good financial result in the previous year.