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 if investors can get a comparable dividend elsewhere, why mess with Walmart before what is sure to be another bad earnings report?
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.
The stock has underperformed in 2013 with 6% returns year-to-date, including an 8% decline since that ugly August report.
Don’t expect a turnaround when WMT reports in November.