Last week’s Walmart presentation to analysts was not well received. The CEO (Doug McMillon) got blame for the short-term costs of the long-term improvements that Wall Street has been clamoring for. One commentator questioned whether Walmart is now “too big to fix,” and I responded on RetailWire:
To say that Walmart is “just too big” is like saying that Apple or InBev are “just too big.” Scale matters, but so does the execution of a successful strategy. It’s ironic that yesterday’s stock-price meltdown is caused by the rollout of the very strategy that Walmart investors have been asking for: Cleaner stores, better customer service and a more robust omnichannel model.
Long-term investors need to judge Walmart not on the results in a given quarter (when most general merchandise chains are lagging) but on the outcomes of investment spending in three to five years. Judge Walmart by its long-term market share gains and operating efficiencies, not by yesterday’s news.