In mid February Walmart report that rather than earning an expected $5.13 for the year, it would earn between $4.75 and $5.00 a share. On the face of it, that is a good thing, but as a growth stock that is not good and its shares fell 10%. The reason the shares fell is the alternatives and they start with Amazon. If Amazon is still growing, why is not Walmart? In an article by Matthew Boyle titled Walmart online sales slow, according to CFO Brett Biggs Walmart was a bit lower than plan. This is important because Walmart’s online shoppers tend to spend twice as much than the bricks-and-mortar customers including buying more higher-priced items.

According to Neil Saunders of GlobalData Retail, young people and professionals do not associate Walmart with online so they default go to Amazon. Sales at Walmart e-commerce unit rose 23% but compared to previous quarters it was half the pace.

Gross profit margins contracted by 50 basis points, however Mr. Biggs does not see that level of decline continuing. Sales were up in food, apparel and toys.

Linking to dividend paying stocks, if you go to a Walmart it will be busy, the question is how much of the shoppers wallet are they getting? The company will continue to make money, but in 5 years will it be bigger? If you buy the stock, what is your horizon?

There are more questions than answers, till the next time – to raising questions.