What Happened?
A number of stocks fell in the afternoon session after Walmart’s results reinforced worries about a stretched U.S. consumer. According to CNBC, Walmart (NYSE: WMT) shares fell nearly 10% even after a revenue beat and a full-year outlook raise, as U.S. comparable sales grew only 2.6% — short of Wall Street’s roughly 3.5% expectation — and third-quarter sales guidance of 3% to 3.75% looked light.
CFO John David Rainey told CNBC the company was eligible for about $2.9 billion in tariff refunds, with just under $100 million still outstanding, and plans to use those funds to lower prices in the third quarter; he also flagged more than $2 billion in incremental fuel-related cost headwinds this year. That combination — softer comps, cautious near-term guidance, and explicit price and fuel pressure — spilled into discretionary and value retailers that investors treat as consumer proxies.
The selloff landed on top of already soft macro reads: July retail sales fell 0.6%, the first decline in nine months, and the University of Michigan’s latest consumer survey showed renewed pessimism as households absorb higher costs for gas and groceries. When the largest U.S. retailer signals customers are still spending but feeling the pinch, the tape often reprices the broader retail complex lower with it.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Department Store company Kohl's (NYSE: KSS) fell 10.3%. Is now the time to buy Kohl's? Access our full analysis report here, it’s free.
- Discount Retailer company Ollie's (NASDAQ: OLLI) fell 5.7%. Is now the time to buy Ollie's? Access our full analysis report here, it’s free.
- Beauty and Cosmetics Retailer company Warby Parker (NYSE: WRBY) fell 5.4%. Is now the time to buy Warby Parker? Access our full analysis report here, it’s free.
Zooming In On Kohl's (KSS)
Kohl’s shares are extremely volatile and have had 43 moves greater than 5% over the last year. But moves this big are rare even for Kohl's and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 28 days ago when the stock dropped 5% on the news that several other major retailers reported disappointing results and outlooks, signaling widespread weakness in consumer spending. The negative sentiment was sparked by grocery chain Albertsons, which cut its annual sales and profit forecasts, citing the need to compete for cash-strapped shoppers.
Albertsons' CEO noted that core grocery faced "increasing pressure from softer industry unit trends and a more cautious consumer." The report sent Albertsons' shares down and also dragged down rival Kroger. Further weighing on the sector, Tractor Supply Company reported a 1.5% decrease in its comparable store sales and updated its financial outlook. This collection of weak results from different corners of the retail industry created concerns that consumer spending is slowing down, impacting investor confidence in companies like Kohl's.
Kohl's is down 19.3% since the beginning of the year, and at $17.22 per share, it is trading 30.3% below its 52-week high of $24.71 from December 2025. Investors who bought $1,000 worth of Kohl’s shares 5 years ago would now be looking at only $300.84.
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