The 2018 holiday shopping season was the best in six years, according to research from Mastercard. Walmart Inc. (NYSE: WMT) did not enjoy the fruits of this. With one trading day left in 2018, shares of the world’s largest retailer were down 6.7% for the year. That puts them at about $92.
It is hard to put the finger on any single problem that troubled investors about Walmart’s performance. The standard criticism is that Walmart could not get out from under the shadow of Amazon. Despite M&A activity and a huge push for Walmart customers to go online, Walmart ran, at best, a distant second to Amazon in e-commerce revenue.
Walmart’s growth continues to be very modest. In its most recently reported quarter, the third quarter of its 2019 fiscal year, which ended October 26, global revenue was $124.9 billion, up from $123.2 billion in the same period the year before. Operating income moved to $5.0 billion from $4.8 billion. Walmart has struggled for years to get operating margins above 5%.
Walmart’s most considerable headache is not its domestic flagship business. Its revenue was $80.6 billion in the most recent quarter, up 3.7%. Walmart has struggled overseas. In the quarter, revenue was down 2.6% to $28.8 billion. Also, Walmart’s Sam’s Club membership retail operation posted a 2.3% drop in revenue to $14.5 billion.
When Walmart posted its numbers, President and CEO Doug McMillon said:
We have momentum in the business as we execute our plan and benefit from a favorable economic environment in the U.S. We’re accelerating innovation and utilizing technology to shape the future of retail. We’re making shopping at Walmart faster and easier. Our associates are equipped with the tools to serve customers better than ever before, and they’re doing a great job. With the holidays approaching, customers can count on Walmart to save them money, and we’ll also provide busy families with another important gift — time back in their day.
Investors have not been as optimistic about the holidays.