Please ensure Javascript is enabled for purposes of website accessibility

Why Wal-Mart Stock Gained 11% in November

By Demitri Kalogeropoulos - Dec 11, 2017 at 10:19AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The holidays won't be as rough on this retailing business as investors had feared.

What happened 

Wal-Mart (WMT 0.86%), the world's biggest retailer, gained 11% last month, according to data provided by S&P Global Market Intelligence, compared to a 2.8% boost for the broader market.

WMT Chart

WMT data by YCharts.

The increase contributed to an epic run for shareholders this year as Wal-Mart's 41% gain puts it in fifth place among the 30 members of the Dow in terms of year-to-date performance.

So what

November's rally was sparked by a surprisingly strong third-quarter earnings report. In that Nov. 16 announcement, Wal-Mart revealed that comparable-store sales gains sped up to a 2.7% pace from 1.8% in the prior quarter as customer traffic growth improved.

Customers walking in a Wal-Mart store.

Image source: Wal-Mart.

The retailer logged impressive results in its e-commerce business, too, with a 50% sales spike likely translating into market share gains in that key niche.

Now what

Contrary to many investors' fears, Wal-Mart is primed for a decent holiday shopping season thanks to a mix of rising digital sales and increasing customer traffic at its existing locations. But whether its stock price rally carries on into 2018 -- or falls flat -- will depend on management's ability to convert those top-line wins into profit growth since Wal-Mart's net income has now declined for two consecutive fiscal years.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Wal-Mart Stores, Inc. Stock Quote
Wal-Mart Stores, Inc.
WMT
$122.63 (0.86%) $1.05

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
316%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/04/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.