Walmart Inc. (WMT.US) reported that its Q2 sales growth fell short of expectations, but several Wall Street institutions remain optimistic. Jefferies Financial Group Inc.: The core operating trend remains solid.

On Thursday, Walmart Inc. (WMT.US) saw its stock price plummet over 9%. The company's second-quarter sales growth in the U.S. market fell short of market expectations, and the weak profit guidance for the third quarter has raised investors' concerns about the company's short-term growth prospects. However, several Wall Street firms, including Jefferies Financial Group Inc., Royal Bank of Canada Capital Markets, UBS Group AG, and Evercore ISI, remain optimistic about Walmart Inc., believing that the sales slowdown is more influenced by specific business and macro factors and that the company's market share growth trend has not changed significantly. According to the financial report, Walmart Inc.'s same-store sales for its U.S. operations grew by only 2.6% year-on-year, below general market expectations. At the same time, the profit guidance provided for the third quarter disappointed investors. During the earnings call, Walmart Inc.'s management stated that the company is proactively lowering prices on certain products in hopes of further expanding market share. This also means that short-term profit performance may be impacted by pricing investments. Jefferies Financial Group Inc. analyst Corey Tarlowe pointed out that while Walmart Inc.'s same-store sales in the U.S. only grew by 2.6%, excluding the health and wellness segment, the same-store sales increase reached 3.4%. The health and wellness segment has been affected by price regulation related to drugs, which has dragged down overall sales growth. Jefferies Financial Group Inc. believes that Walmart Inc.s core operating trend remains robust, with transaction volumes continuing to grow, as the company expands its market share across multiple categories. Additionally, e-commerce, advertising, third-party platforms, and membership businesses are all performing strongly. Therefore, Jefferies maintains a "Buy" rating on Walmart Inc. Royal Bank of Canada Capital Markets analyst Steven Shemesh also remains optimistic. He noted that excluding tariff refund factors, Walmart Inc.'s operating profit still achieved close to a 10% growth. While investors may question whether the company still deserves a high valuation given the current growth rate of its U.S. operations, RBC believes this reflects more of the broader macroeconomic environment rather than a slowdown in Walmart Inc.s market share growth. RBC asserts that compared to other retailers, Walmart Inc. still possesses structural competitive advantages, leaving significant room for revenue and profit growth in the future. UBS Group AG analyst Michael Lasser stated that this earnings report may further spark market debates regarding Walmart Inc.'s valuation and growth prospects, but the firm remains positive about the company. Evercore ISI continues to maintain an "Outperform" rating. Analyst Greg Melich noted that Walmart Inc.s sales growth actually reached the upper end of its previous guidance range, while the company raised its full-year sales growth expectation to 4.0% to 5.0%. Evercore believes that the current trajectory of profit growth reflects Walmart Inc.'s proactive price investments and market share pursuits, rather than significant issues with consumer demand. In other words, the company is leveraging its scale and profitability to further strengthen its competitive advantages through price reductions. Despite several Wall Street firms continuing to view Walmart Inc.s long-term fundamentals positively, the lower-than-expected U.S. sales growth and weak third-quarter profit guidance still put short-term pressure on investors. The market will next focus on whether Walmart Inc.'s pricing strategy can further drive customer traffic and market share growth and what impact this strategy will have on profit margins.