The Numbers Don't Lie: Wal-Mart May Be in Trouble

Walmart's annual revenue has shrunk for the first time in 45 years, with profits expected to decline due to slowing retail traffic in the US. Despite a stock comeback in 2016, Walmart trails the S&P 500 and retail ETF over five years, primarily due to stagnant revenue growth. Analysts predict flat sales this year, with a slight recovery next year. Factors like increased spending on web operations, rising labor costs, and a strong US dollar are impacting net income, expected to fall by 13%. Internationally, Walmart faces challenges due to the strong dollar, affecting sales by $12 billion. As the largest US grocer, Walmart is expanding online grocery services and opening smaller stores to boost sales, with these smaller stores outperforming the chainwide average.

What was a significant factor in Walmart's revenue decline?

• Reduction in store numbers

• Slowing retail traffic in the US

• Increased competition from local retailers

• Decrease in online sales

How did Walmart's stock perform over a five-year period compared to the S&P 500?

• It trailed the S&P 500

• It was not compared to the S&P 500

• It outperformed the S&P 500

• It matched the S&P 500

What is one reason for the projected decline in Walmart's net income?

• Reduced product prices

• Lower labor costs

• Decreased marketing expenses

• Spending on web operations

What impact does a strong US dollar have on Walmart's sales?

• Has no impact on sales

• Reduces overseas sales

• Increases domestic sales

• Boosts online sales

What is a feature of Walmart Neighborhood Stores?

• They are smaller than supercenters

• They only sell groceries

• They focus on luxury goods

• They are larger than supercenters