Walmart reported a soft quarter despite receiving roughly $2.9 billion in tariff refunds, which helped push gross margin to 25.4% and beat revenue and adjusted earnings estimates, but the stock fell more than 8% after comparable sales came in at 2.6% versus the 3.5% expected. CFO John David Rainey called the business strong, but investors backed out the one-time refund and focused on the comp-sales miss. Target received a $994 million version of the same refund and beat estimates even after stripping it out, with adjusted EPS of $2.46 against a $2.33 estimate and comparable sales of 3.8% against 2.4% expected. The refunds stem from the Supreme Court's February ruling against IEEPA tariffs, and since every major retailer got the same windfall, investors graded the underlying results, where Walmart's remainder showed a retailer charging more per grocery run to fewer customers.
Walmart Inc.Walmart's comparable sales missed expectations, showing fewer customers despite higher prices per grocery run.
Target CorporationTarget beat estimates even after stripping out the tariff refund, with adjusted EPS and comparable sales above expectations.
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