Wal-Mart Up 120,000% Since IPO

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Wal-Mart’s Stores Inc. (NYSE: WMT) has staggered over the past few years as e-commerce has eroded some of its presence as the largest retail company in America. However, from the time of its initial public offering¬†in 1969 through the present, its shares are up 120,000%.

Wal-Mart, founded by Sam Walton in 1950, had a small number of stores in 1969. Even as the company grew, Walton visited each store every year. Today, Wal-Mart’s store count in the United States is over 5,000 stores and clubs, according to the Wal-Mart. It employs 1.5 million people in the United States. Its global sales are just above $485 billion.

One sign of Wal-Mart’s struggles is that its share price is only up 21% in the past five years, while the S&P 500 is higher by 84% over the same period. The company’s revenue growth has slowed significantly, from $469 billion in fiscal 2013 to the $485 billion in fiscal 2017.

Most analysts believe the company that has siphoned off most of Wal-Mart’s growth potential is Amazon.com Inc. (NASDAQ: AMZN). The case is fair, as is the one that many other retailers have been hurt worse. Amazon’s e-commerce operation had revenue of $80 billion last year. The number likely will top $100 billion for full year 2017. Wal-Mart has been able to weather the change better than most. The rotation of the industry to e-commerce has ruined companies like Macy’s and J.C. Penney.

Unlike smaller brick-and-mortar retailers, Wal-Mart has the capacity to expand via mergers and acquisitions. It bought large e-commerce retailer Jet.com for $3.3 billion in stock and cash in August 2016. More recently, it bought outdoor online retailer Moosejaw and footwear e-commerce company Shoebuy. The weakness of the Wal-Mart moves is that none, even Jet, is large enough to make a dent in the gap with Amazon, even when it combines with Walmart.com, which is generally considered the second largest e-commerce operation in America.

Wal-Mart announces earnings this week. If it grows by even 2% it will be considered a victory. The very modest advance is a long way off from the rocket-like growth that took its shares up 120,000% over the past six decades.