Walmart’s Second Quarter Results Disappoint
Posted on August 17, 2012 by jway
Yesterday, Walmart released its second quarter results which fell well short of expectations.
The company is still in negative same store sales on a three year stacked basis, far behind Target, its closest big box competitor. Its pace of growth has slowed as well, both domestically and internationally. After posting a 2.6 percent U.S. growth rate in the first quarter, Walmart came in at 2.1 percent for the second.
As the company deals with the fall-out of the Walmart de Mexico bribery scandal, which now includes allegations of tax evasion and money laundering in addition to buying off officials, Walmart plans to scale back its expansion overseas. Instead of the 30 to 33 million square feet of international floor space Walmart had said it would add this year, it now plans to add 21 to 23 million.
Here in the United States, Walmart’s management of its store operations could make for a bleaker future. As Walmart attempts to compensate for weak sales, it has continued cut worker hours, a trend that threatens to undermine its instocks and customer satisfaction. Moreover, Walmart’s attempts to open stores in cities like DC and New York have been stymied due to its refusal to hold an open, honest dialogue about the treatment or workers and the needs of neighborhoods. These “unprecedented levels of community engagement,” (to use Walmart spokesperson Steve Restivo’s words) have accounted for delays in DC and a complete inability to gain a foothold in New York City.
This post was written by Kurt Scott.