Walmart’s growth remains slow

Increased competition, poor weather have investors casting doubt.

Walmart held its ground during an unseasonably wet first quarter, but it wasn’t enough to soothe investor concerns.

Comparable sales at U.S. Walmart stores grew 2.1 percent in the three months ended April 30, the company said Thursday, just shy of analysts’ estimates. Customer visits had the slowest growth in more than a year, and while the retail giant said business has picked up in recent weeks, it didn’t assuage shareholders. The stock fell as much as 2.6 percent.

“Traffic and the U.S. comparable sales were softer than expected,” Chuck Grom, an analyst at Gordon Haskett Advisors, said by phone. “People are glass half-empty right now, so the bears grab that and run with it.”

Poor weather also buffeted Home Depot last quarter. At Walmart, it compounded a challenging overhaul abroad that has kept Chief Executive Officer Doug McMillon busy in recent months. The world’s biggest retailer generates most of its profits and sales in the U.S., and its heavy spending to lower prices and expand its online business has investors on edge.

Another factor weighing on the stock: Kroger Co., the second-biggest U.S. grocer, made a deal with British e-commerce outfit Ocado Group to strengthen its offering through automated warehouses and home delivery. The food fight is getting fiercer, after Amazon said this week it would offer its millions of Prime members discounts of 10 percent on hundreds of items at Whole Foods.

Through Wednesday’s close, Walmart’s stock had already dropped 13 percent this year following two years of gains.

Online revenue in the U.S. rose 33 percent last quarter, better than the holiday quarter’s subpar performance of 24 percent — but below the 40 percent pace the company had forecast.

To better compete, Walmart just unveiled a redesigned website that’s more personalized, and in the coming weeks will introduce a site featuring more upscale apparel from department-store chain Lord & Taylor. It’s also brought its online grocery curbside pickup service to 1,400 stores, with an eye to reach 2,100 by the end of the year.

Walmart’s main business remains brick-and-mortar, and the unseasonable weather kept people from visiting stores in April, lowering demand for summer items.

“We never do like to blame the weather, but in this case it was unseasonably cool and wet,” Chief Financial Officer Brett Biggs said in an interview. “That impacts some of the seasonal categories.”