Today’s Walmart Q4 earnings report was weak, as expected. Why? As we have been saying, the weakness of the economy has certainly had an effect on Walmart’s core customer, but Walmart has brought many of its current struggles on itself by continuing to stubbornly stick to a broken business model. But rather than adequately staff stores and make changes to the business model, Walmart brass have looked the other way and pinned the blame for its FY 2014 struggles anywhere it can other than on Walmart itself. Let’s take a look at six things that Walmart execs have dubiously cited as reasons for poor performance this past fiscal year:
1. The winter weather! Yes, there’s been widespread bad weather this winter, but industry analysts point out that weather can be a convenient scapegoat for companies looking to divert attention from what are actually deep-rooted problems. Walmart has made only vague assertions about the weather’s impact and hasn’t provided any details or data to make a credible argument that weather is truly at fault for its underperformance, so it’s fair to imagine company execs are seizing upon bad weather as a way to explain away that underperformance. The company hasn’t quantified the financial effect that weather allegedly had, or compared sales in areas that have had severe weather with sales in areas that have not, or explained why pre-storm shopping trips (and post-storm re-stocking trips) didn’t make up for any sales lost during a weather event itself.
2. The spring weather! Seriously, Walmart has been complaining about the weather all year. Back in the second quarter of this fiscal year, a cooler spring apparently hurt sales. Is there a limit to how many times companies can try to blame weather?
3. The holiday season was shorter. Wait, but didn’t Walmart say it had the best Black Friday ever? Wasn’t it hyping Christmas way back in August and putting out Christmas-related items alongside Halloween items as early as September? Guess the “best” Black Friday and major holiday creep into summer and back to school season wasn’t enough to make up for six fewer days between Thanksgiving and Christmas.
4. Cuts to SNAP. Ha ha, remember when Walmart U.S. CEO Bill Simon made the bizarre statement that cuts to food stamps could be a good thing for Walmart’s business? As it turns out, consumers having less money to spend on food was not a good thing.
5. Obamacare. But if Americans have to spend money to meet legal requirements for health insurance coverage, they’ll have less money to spend at Walmart!
6. A “soft” flu season. Fewer people got the flu this year, which is generally considered a good thing. Not for Walmart, though: Bill Simon pointed out that a “soft” flu season put negative pressure on Walmart’s pharmacy business. Walmart needs more of you to get sick, okay?
Walmart must not be expecting much (if any) improvement in the quarters to come, as the company issued cautious guidance for the fiscal year that started February 1. If FY 2015 results are as weak as they were in 2014, what will Walmart executives blame?