Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Quick Hits: Recession Hits Wal-Mart. Finally.


Brief scrutiny of today's headlines.

You know times are tough when Wal-Mart's (WMT) sales don't meet expectations.

It appears that hunkered-down consumers are cutting even deeper than expected, forcing Wal-Mart to reduce its earnings outlook.

Wal-Mart said same store sales, or sales at stores open at least a year, grew 1.7% in December. Analysts expected a 2.8% increase.

Wal-Mart cut its earnings forecast to $0.91 to $0.94, from $1.03 to $1.07 a share.

Competitors cut prices to keep pace with Wal-Mart, but it wasn't enough to boost sales.

Costco (COST) reported a 4% drop in December same store sales. Target (TGT) said same-store sales declined 4.1%.

However, BJ's Wholesale Club (BJ) said sales increased 1.6% in December but it was the smallest increase after 7 months of double-digit growth.

Stores cut prices in an effort to gain market share and clear holiday inventory. The markdowns will erode fourth quarter profitability. Worse, there's no good news ahead. Retail Metrics, a research firm, expects retailers' fourth-quarter earnings to drop 19.3%. The decline increases to 27.5% when Wal-Mart is excluded.

Hanky-panky, or at least hanky-panky with a bit of ceremony, also took a hit. Limited Brands (LTD), parent of Victoria's Secret and Bath & Body Works, reported a 10% drop in same store sales. It was a rotten end to a rotten year when sales declined every month.
< Previous
  • 1
Next >
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Featured Videos