On Wednesday, Walmart's social media team determined that the sign had appeared at a store in Evansville, Indiana, and that it has since been removed.
Walmart officials are still investigating where the photo was taken.
The display is part of an action-hero themed marketing campaign that has no connection to the sale of firearms.
Walmart says "what's seen in this photograph would never be acceptable in our stores".
'We regret this situation and are looking into how it could have happened, ' the spokesperson added.
The photo appeared to create confusion within the company, whose explanation for the store's location is at odds with a woman claiming to have seen and photographed the display. But the Post later spoke with the woman behind the initial photograph, who confirmed to the publication that the picture was taken at the IN store.
Crowson told CNNMoney on Wednesday evening Walmart was still trying to find the sign and gun display. "... People don't seem to honestly care".
Walmart's Twitter account replied to dozens of angry comments about the photo.
'Is this real? Literally... One person asked: "What are you suggesting?"
The company quickly issued an apology on Twitter, saying the sign had been removed. Thanks again for alerting us to this.
This isn't the first time Walmart's marketing strategy has left consumers outraged.
Though Walmart officials scratched the IN store off its list, Leeanna May, who told The Washington Post she snapped the now-viral photo, maintained that the "disgusting" display was at a location IN Evansville. A photo showed boxes of stacked up to resemble the World Trade Center in what appeared to be an attempt to commemorate the September 11 attacks.