Walmart (WMT) is the world’s biggest retailer, and certainly has scale and a degree of stability from that reach. But stability is not growth — and Walmart has been struggling to move its sales in the right direction for some time.
In its May earnings report, Walmart U.S. saw same-store sales slip for the first time in almost two years — an uncomfortable reminder of the bleak run from 2009 to 2011 that featured an ugly streak of nine consecutive quarters of same-store sales declines.
WMT repeated that performance with an earnings miss in July and continued declines in same-store sales — and a lowered outlook to boot.
There’s a very good chance that WMT could see similar sales declines again in Q3 when it releases earnings in November, too. Consumer spending hasn’t exactly been great and the recent history shows Walmart is under pressure.
The stock certainly isn’t bankrupting investors, with 11% returns year-to-date and a nice 2.5% dividend. But there are stronger alternatives out there right now, so consider dumping Walmart before earnings.
Jeff Reeves is the editor of InvestorPlace.com and the author of “The Frugal Investor’s Guide to Finding Great Stocks.” Write him at firstname.lastname@example.org or follow him on Twitter via @JeffReevesIP. As of this writing, he did not own a position in any of the stocks named here.