Tuesday, May 13, 2008
Wal-Mart Quarterly Profits Up 6.9%
Bentonville, Arkansas based retailer Wal-Mart Stores Inc. topped analysts' forecasts by 1% to post a net income of $3.02 billion (76 cents per share) for the quarter ended April 30th, an increase of 6.9% over last year's first quarter income of $2.83 billion (68 cents per share). Revenue rose 10% to $94.1 billion.
Donna Kardos, Wall Street Journal, reports that, looking forward, Wal-Mart projected fiscal second-quarter earnings of 78 cents to 81 cents a share. Analysts were expecting 81 cents. U.S. same-store growth is seen flat to up 2% growth. Shares of Wal-Mart closed Monday at $58.02 and fell to $57.65 in premarket trading.
Also, Wal-Mart may be benefiting from a bump in overseas sales to counter the slowdown in the U.S. market. Marketwatch reports that outside of the United States, Wal-Mart's expansions into international markets such as Brazil and China also are yielding fruit, countering the consumer slowdown in the United States, analysts added. First-quarter sales outside the States surged 22%, compared to the 6.6% growth at Wal-Mart-branded stores and 7.6% sales growth at Sam's Club.
The drop in Wal-Mart's share price is not only due to its own internal grim projections for the next quarter, but also due to lagging sales and expectations of a continued slow outlook throughout the retail sector for the coming quarter. Continuing in this vein, Tom Van Riper, Forbes, writes about a 'black tuesday' for retailers. Big department stores Macy's, which reports on Wednesday, and J.C. Penney, which goes on Thursday, are both expected to show a 4.5% decline in sales. Lehman Brothers economist Drew Matus sees a fundamental slump in consumer spending lasting through the first quarter of 2009, save for a modest early summer push spearheaded by government rebate checks.
So, if anything, Wal-Mart is actually benefiting because consumers are migrating to it from other retailers. More on this from Chris Burritt, Bloomberg News. Wal-Mart, Target and Costco are all continuing to gain market share in this environment,'' Susan Kahn, a Target spokeswoman, said yesterday in a telephone interview. They're probably taking shoppers from retailers with falling comparable-store sales, she said.
In related Wal-Mart news, initial findings of a study at the Center for Urban Research and Learning at Loyola in Chicago shows a relation between a Wal-Mart opening and local retailers going out of business. Report from Sandra M. Jones, Chicago Tribune reporter, states that researchers from Loyola University Chicago and the University of Illinois at Chicago tracked 191 stores within a three-mile radius of Wal-Mart from March 2006, six months before the store opened, through November 2007. The team found 23 stores, or 12 percent, of the businesses in the study group shut down last year.
Donna Kardos, Wall Street Journal, reports that, looking forward, Wal-Mart projected fiscal second-quarter earnings of 78 cents to 81 cents a share. Analysts were expecting 81 cents. U.S. same-store growth is seen flat to up 2% growth. Shares of Wal-Mart closed Monday at $58.02 and fell to $57.65 in premarket trading.
Also, Wal-Mart may be benefiting from a bump in overseas sales to counter the slowdown in the U.S. market. Marketwatch reports that outside of the United States, Wal-Mart's expansions into international markets such as Brazil and China also are yielding fruit, countering the consumer slowdown in the United States, analysts added. First-quarter sales outside the States surged 22%, compared to the 6.6% growth at Wal-Mart-branded stores and 7.6% sales growth at Sam's Club.
The drop in Wal-Mart's share price is not only due to its own internal grim projections for the next quarter, but also due to lagging sales and expectations of a continued slow outlook throughout the retail sector for the coming quarter. Continuing in this vein, Tom Van Riper, Forbes, writes about a 'black tuesday' for retailers. Big department stores Macy's, which reports on Wednesday, and J.C. Penney, which goes on Thursday, are both expected to show a 4.5% decline in sales. Lehman Brothers economist Drew Matus sees a fundamental slump in consumer spending lasting through the first quarter of 2009, save for a modest early summer push spearheaded by government rebate checks.
So, if anything, Wal-Mart is actually benefiting because consumers are migrating to it from other retailers. More on this from Chris Burritt, Bloomberg News. Wal-Mart, Target and Costco are all continuing to gain market share in this environment,'' Susan Kahn, a Target spokeswoman, said yesterday in a telephone interview. They're probably taking shoppers from retailers with falling comparable-store sales, she said.
In related Wal-Mart news, initial findings of a study at the Center for Urban Research and Learning at Loyola in Chicago shows a relation between a Wal-Mart opening and local retailers going out of business. Report from Sandra M. Jones, Chicago Tribune reporter, states that researchers from Loyola University Chicago and the University of Illinois at Chicago tracked 191 stores within a three-mile radius of Wal-Mart from March 2006, six months before the store opened, through November 2007. The team found 23 stores, or 12 percent, of the businesses in the study group shut down last year.
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