Walmart reported Thursday that its U.S. comparable sales rose 2.6% year over year, marking the company’s slowest quarterly growth since 2020 and falling short of the 3.8% increase expected by analysts surveyed by FactSet. The company said new pharmacy pricing rules weighed on the results. Excluding that impact, comparable sales would have increased 3.4%. Walmart shares fell as much as 8% in early trading following the announcement.

As higher oil prices prompt some consumers to tighten spending, Walmart’s growth is increasingly shifting away from its traditional supercenters toward e-commerce, membership and advertising businesses. U.S. e-commerce revenue climbed 24% during the quarter and now accounts for nearly one-quarter of the company’s total sales.

Chief Financial Officer John David Rainey said traditional comparable-store sales are no longer as meaningful as they were a decade ago. Many customers place orders online and pick them up in store parking lots, while Walmart stores increasingly serve as fulfillment hubs for online orders and rapid delivery. The company’s senior management is considering new reporting methods that would more accurately reflect the role of stores in its evolving business model.

Grocery, toys, apparel and private-label products performed strongly during the quarter. Walmart said it continued to gain overall market share, with particularly strong growth among households earning at least $100,000 annually. Lower-income customers are still spending, but higher fuel costs are forcing them to make trade-offs even among essential purchases.

Walmart also used an additional $2.9 billion in tariff refunds to lower prices on selected products. Although higher overall costs kept average prices slightly above year-ago levels, the retailer introduced further price reductions late in the quarter to ease the financial pressure on consumers.

Despite slower comparable-sales growth, Walmart raised its full-year outlook. The company now expects net sales to increase between 4% and 5%, up from its previous forecast of 3.5% to 4.5%. It also raised its operating-profit growth forecast from 6%–8% to 7%–8.5%.