Walmart reported its slowest quarterly sales increase in six years, citing rising fuel costs and shifting consumer spending habits.

Walmart reported a 2.6 percent increase in US same-store sales for the second quarter, falling short of the 3.8 percent forecast by LSEG analysts. This performance represents the company's slowest quarterly growth in six years. The retailer attributed the slowdown to higher fuel prices, which have prompted consumers to make trade-offs in their spending.

Impact of Rising Costs

CFO John David Rainey noted that fuel prices exceeding $4 per gallon have created a psychological impact on shoppers. According to the American Automobile Association, the average price for a gallon of petrol reached $4.10 on Thursday, up from $4.07 the previous week. Walmart expects to face $2 billion in incremental fuel-related costs beyond its initial guidance.

Shifting Consumer Behavior

While in-store foot traffic growth slowed to 1.5 percent from 3 percent in the previous quarter, Walmart’s US e-commerce sales increased by 24 percent. The company recently announced price cuts on 11,000 items, supported by $2.9 billion in tariff refunds. Despite the overall sales slowdown, Walmart upgraded its net sales growth forecast to a range of 4 to 5 percent.

Broader Retail Trends

Other retailers are also experiencing a pullback in consumer spending. TJX reported 1 percent sales growth, down from 6 percent in the prior quarter, while Target reported a 5.3 percent jump in net sales to $26.5 billion. Following its earnings report, Walmart shares fell 9.6 percent, while TJX and Target shares saw declines of 1.7 percent and 0.1 percent, respectively.