Wal-Mart Losses May Be Funny Accounting, Not Sticky Fingers

One of the biggest problems Wal-Mart identified in its latest profit warning was what it calls “shrinkage.” Greg Foran, president and CEO for Wal-Mart U.S. said on the earnings call that “accelerating pressures in shrink” were one of three major factors that contributed to the company’s underperformance. The others were an overall decline in gross margin and lower-than-expected pharmacy reimbursements. However, Wal-Mart's goal to reduce overall inventory balances may be contributing to its problem of “disappearing” inventory.