Too Big for Its Riches

That great American retailing machine, Wal-Mart Stores, just keeps rolling along, doesn't it? Even in the current "challenging retail environment," Wal-Mart announced last week that sales in the fiscal year ending Jan. 31 increased a respectable 16% to $191.3 billion, while earnings hit a record $6.3 billion—a 17% jump. But hidden amid that thicket of good news is a thorny problem: Wal-Mart's European operations aren't reaching the levels of growth needed to make the company's expensive leap across the pond pay off. "Wal-Mart has not yet succeeded in markets that it cannot drive a truck to," says London-based investment bank...