Walmart Is Leaning More on Its International Business, and That Could Signal a Problem for Investors

(NYSE: WMT) has impressed investors this year as the company doesn't appear to have the problems other retailers do. It's not blaming bad results on "shrink" (or retail theft), for example, and its business is still delivering some solid growth. Year to date, the stock has risen 16% while rival Target has gone in the opposite direction, nosediving by 17%.

But while Walmart is doing well, it's not performing all that great in the U.S. domestic market, where its growth rate has been slowing down. And this is something that investors should watch out for because if the retail giant is relying on its international operations for growth, the stock could become vulnerable.

In Walmart's most recent quarter, ended July 31, operating income rose nearly 7% year over year to $7.3 billion. That's a healthy growth rate at a time when retailers are struggling with rising costs. But what's notable is that the vast majority of those profits comes from the U.S. segment. Walmart U.S. reported operating income of $6.1 billion versus less than $1.2 billion from Walmart International. The margins that Walmart generates are also slightly higher in the U.S. market.

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Source Fool.com