|
Wal-Mart had this to say last week:
Wal-Mart Stores division's comp sales are currently within the 4-6 percent range for the month. Total company comp sales for the month are around the low end of the 4-6 percent range. Wal-Mart
With this in mind, that Wal-Mart reported August sales only 3.8% higher than in 2001 confirms 1 of two things:
1) Wal-Mart’s previous forecast was not properly calculated.
2) Since August 26 sales plunged below previous levels (expectations) dragging monthly sales lower.
It goes without saying that Wal-Mart is the retail industry indicator. Moreover, and since Wal-Mart has economies of scale beyond that of their competitors, the company is likely to be one of the more sturdy companies during an economic downturn. Nevertheless, that Wal-Mart is posting results below expectations right now is an important economic indicator – one that deserves much attention heading into holiday season…
 |
As evidenced by strong August auto sales, American’s are driving around in style. However, what they are doing as often as they did just 1 week ago is stopping in at Wal-Mart. WMT is expected to increase earnings by 14% over each of the next 5-years. Not unlike DELL, WMT may be able to keep the ball rolling by stealing more marketshare, but 14%??? If a real recession arrives, or one in which consumers save rather than spend wildly, 14% will be shot down. Moreover, if WMT posts another poor sales week analysts may take aim at Wal-Mart’s near term bottom line forecasts. Wall Street held it’s fire today
|
|
All data and information within these pages is thought to be taken from reliable sources but there is no guarantee as such. All opinions expressed on this site are opinions and should not be regarded as investment advice.
Copyright © 2000, 2001, 2002
FallStreet.com