Wal-Mart Stores Inc. (NYSE: WMT) has posted the worst performance among Dow Jones Industrial Average (DJIA) components this year, down 29.5%. The DJIA is off 2.3% for the year.

Wal-Mart’s drop can be attributed to several reasons. The primary one is competition from smaller retailers on the one side and from Amazon.com Inc. (NASDAQ: AMZN) on the other. Many midsized retailers, led by J.C. Penney Co. Inc. (NYSE: JCP) and Sears Holdings Corp. (NASDAQ: SHLD), the parent of Sears and Kmart, need solid sales to survive in their current incarnations beyond the holidays. They are not alone, however, when it comes to slashing prices. Worries about consumer confidence and the warm weather have caught retailers by surprise, leaving them to scramble to get inventory out their doors.

Competition on price from other traditional retailers hurts Wal-Mart as much as any other retailer because of its $300 plus billion in annual sales in the United States. As the holder of the largest market share in the industry, its customers are an important target.

Amazon has been identified as Wal-Mart’s most dangerous rival for years. Its forecasts for the current quarter are amazing:

Fourth Quarter 2015 Guidance

• Net sales are expected to be between $33.50 billion and $36.75 billion, or to grow between 14% and 25% compared with fourth quarter 2014.
• Operating income is expected to be between $80 million and $1.28 billion, compared to $591 million in fourth quarter 2014.
• This guidance includes approximately $620 million for stock-based compensation and amortization of intangible assets, and it assumes, among other things, that no additional business acquisitions, investments, restructurings, or legal settlements are concluded and that there are no further revisions to stock-based compensation estimates.

Wal-Mart will be fortunate to post flat revenue for the same period. The comparable store sales for Wal-Mart U.S. in the most recent quarter rose by only 1.5%.

Wall Street has lost almost all confidence that Wal-Mart can ever be the growth stock it was at one point. Its revenue in the most recently reported year was $484 billion. Ten years ago, the figure was $314 billion. That performance has flattened considerably in the past three years.

While Wal-Mart’s share performance may improve some next year, it won’t become one of the DJIA price increase leaders. Its situation is too troubled.

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