It may not rely on such tech bubble (ver 1.0 and 2.0) buzzwords as eyeballs, clicks, "story", "sharing", "hyperxxxx, "non-GAAP" and so on, in fact with 2.2 million worldwide employees Wal-Mart (WMT) is as old-school as it gets, which is why the fact that what was once the world's most valuable retailer (until Amazon (AMZN) dethroned it a month ago) just reported not only a miss, on tumbling operating earnings, but slashed its guidance by 7%, should be very troubling to anyone who still looks as such trivial things as "fundamentals" and how these reflect the even more trivial "economy."

This is what happened:

• Despite reporting revenue of $120.2 billion, or virtually unchanged from a year ago, and above the $119.7 billion expected, WMT reported EPS of $1.08, below the exp. $1.12. WMT promptly blamed exchange rates as the culprit for the $0.04 miss. Needless to say, when the dollar is weak no company ever says "EPS beat by $X.XX because of a favorable exchange rate."
• The first problem emerged when looking at operating income, which dropped by -10.0% consolidated, and tumbled by a whopping -14.2% in the firm's international stores.
• What was even more problematic is that while Wal-Mart reported a 4.8% increase in Net Sales in the US, rising to $74 billion, domestic Operating Income also tumbled by 8.2% to $4.8 suggesting there is a significant margin compression going on.  Expect mass layoffs next as the company realizes that boosting minimum wages always has a profit trade off.
• Then there was the most important factor: free cash flow. "Free cash flow was $5.1 billion for the six months ended July 31, 2015, compared to $6.8 billion in the prior year. The decrease in free cash flow was due to lower income from continuing operations and the timing of payments."
• But the worst news for WMT shareholders, and the reason why the stock is down 3% pre-market is because the company slashed its guidance as follows: Walmart updated full year EPS guidance to a range of $4.40 to $4.70, from a previous range of $4.70 to $5.05. This range includes Q3 EPS guidance of $0.93 to $1.05.

But at least stock was being repurchased: The company paid $1.6 billion in dividends and repurchased approximately 14 million shares for $1.0 billion. Even if it means a few thousand less greeters...

Oh well, time to brush such old-economy behemoths as WMT aside, and focus on the "new economy" stalwarts such as AMZN, which may have a fraction of WMT's sales and profit, but at least it has a greater market cap. At least until investors realize that the secular decline in the US and Global economy as demonstrated by WMT is for real, and "stories" and "hype" can only carry you so far.

Full breakdown of WMT results: