What's going on?

Wal-Mart reported its 2015 results on Thursday and it wasn�t pretty: holiday sales were lower than expected, the company�s outlook for future sales was cut and the stock sold off more than 4%.

What does this mean?

There had been some signs of optimism when Wal-Mart last reported results in November, but as we pointed out at the time, it only �beat expectations� because it had already lowered that guidance. Now, it�s lowering its guidance again: it says sales growth this year is likely to be flat versus a previous expectation of +3-4%. Amongst other reasons, Wal-Mart said that it�s being hurt by deflation (i.e. falling prices) in some of the food it sells (e.g. meat and dairy) � that means it has to charge customers less. Also, its e-commerce growth was much slower than it has been in previous quarters.

Why should I care?

For the stock: Wal-Mart had been having a good year. Its stock was up about 8% this year (a very good performance given overall US stocks are down about 6%). Investors had flocked to Wal-Mart partly because it�s viewed as safe: even in a recession, people shop at Wal-Mart. There was, also, perhaps a view that Wal-Mart�s turnaround efforts (especially in e-commerce and its �in-store� customer experiences) would start bearing fruit. But the results have left investors with the same old concern: sales growth. And the turnaround plan remains a work in progress.

For you personally: It might not feel like it, but life should be getting more affordable. Let�s review: in the US, average wages have gone up by about 2.5% in the past year but the cost of gasoline has declined sharply while, it appears, food is getting cheaper as well (overall inflation is just above zero). More data came out on Thursday showing that lots of people have jobs. The broad trend is true for countries like the UK and Germany as well. Yes, housing remains a very expensive part of most people�s budgets, but, on the whole, the average person should be finding life just a little more affordable.