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Wal-Mart Stores, Inc. (WMT) Finds It Hard to Grow

Wal-Mart Stores, Inc. (NYSE:WMT) announced its second-quarter results today and again failed to beat analysts’ expectations. The company witnessed its seventh straight quarter of traffic decline. Although Wal-Mart Stores, Inc. (NYSE:WMT) saw growth in every country except China, it’s the company’s U.S. Supercenters sales that have dampened the spirits of analysts and investors. The company’s Neighborhood Market and smaller format stores also saw an increase in sales, but not enough to cover for the decline in sales at its supercenters. The worst news for Wal-Mart Stores, Inc. (NYSE:WMT)’s investors in the second quarter results was the company cutting down its earnings forecast for the year.

Wal-Mart (WMT)

Julie Hyman from Bloomberg broke down Wal-Mart Stores, Inc. (NYSE:WMT) second quarter results and discussed the road ahead for the company.

“Wal-Mart Stores, Inc. (NYSE:WMT) has been struggling. On a sort of incremental basis things got a very little bit better, after five quarters of declining comparable sales, it came in with flat comparable sales, but that’s probably the best of the news because Wal-Mart Stores, Inc. (NYSE:WMT) cut its forecast for full year earnings. Now it’s looking for $4.90 to $5.50 a share, before it has looked at as much as $5.45 […],” Hyman said

Hyman mentioned that Wal-Mart Stores, Inc. (NYSE:WMT) is not pointing to anything that is wrong with its core business for the decline in sales, but instead is pointing to other things like healthcare costs, rising taxes and its e-commerce investments. Hyman also highlighted that Wal-Mart Stores, Inc. (NYSE:WMT) said while releasing its earnings that it expects its e-commerce arm to grow at a slightly lower pace than what it expected earlier.

“So, the new CEO of U.S. Business, it seems like he is well regarded, but it’s just the matter of the big challenges he has ahead of him. There are things that are not under Wal-Mart Stores, Inc. (NYSE:WMT)’s control […],” Hyman added.

Disclosure: None

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