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Aug. 20 (UPI) — Walmart on Thursday reported sales grew at their slowest pace in the retailer’s latest fiscal quarter in six years, sending its shares down more than 9%.

In the second quarter ended July 31, comparable sales in the US, including stores and digital channels open for at least a year, were 2.6%, the smallest advance since 2020, Walmart said.

“Customers tell us they’re still feeling some pressure,” Walmart CEO John Furner said on an earnings call with analysts.

Walmart blamed the disappointing sales growth partly on new federal rules on drug pricing that cut the prices of several costly medications for those enrolled in Medicare.

The company is also anticipating at least $2 billion in extra costs this year from higher gasoline prices due to rising oil prices due to the U.S.-Israeli war with Iran.

As the national average for a gallon of regular gasoline has risen to $4.10 from $2.98 and inflation spiked to 3.4% from 2.4% before the conflict, Walmart said consumers are making adjustments.

“As you go through month by month in the last quarter, you can tell when fuel prices increased and got above $4, and perhaps there’s a psychological impact to that, that there are choices that consumers are making,” Walmart finance chief John David Rainey told analysts. “It’s why we have leaned so heavily into lower prices.”

Meanwhile, Walmart said it has seen gains as more affluent customers trade down as their budgets tighten.

For the full year, Walmart expects net sales to rise 4% to 5%, up from 3.5$ to 4.5% previously. Operating income is expected to rise 7.5% to 8.5%, up from an earlier view for 6% to 8%.

Rainey told CNBC that Walmart is eligible for tariff refunds of around $2.9 billion, and it has yet to receive nearly $100 million of that. He said the funds would be used to lower prices.