Thursday, December 6, 2007

Wal-Mart's Results: This Thing Could Be Turning

Wal-Mart (WMT) reported November sales today and it is continuing to gain momentum.

                        Net Sales
4 Weeks Ended Percent 43 Weeks Ended Percent
11/30/2007 12/1/2006 Change 11/30/2007 12/1/2006 Change

Wal-Mart Stores $20.165 $19.244 4.8% $192.347 $181.456 6.0%
Sam's Club 3.620 3.331 8.7% 36.160 33.797 7.0%
International 7.933 6.690 18.6% 73.024 62.356 17.1%
Total Company $31.718 $29.265 8.4% $301.531 $277.609 8.6%

Company same-store-sales rose 1.5%.

Wal-Mart Stores

Grocery and pharmacy continued to drive strong comparable store sales during the November four-week period. In addition, Wal-Mart had very solid "Black Friday" sales across the store, from entertainment items to sleepwear.

Sam's Club

In the November four-week period, Sam's Club had strengths in a number of holiday and gift-giving categories, including electronics and video games.


The Company expects the comparable store sales of its U.S. operations for the December five-week reporting period to be between one and three percent. Can Wal-Mart just stop giving us guidance? One to three percent, we get it. Let's just save the time and we'll assume it. Just let us know if it will be anything different.

All in all, what is not to like? The international operation continue their growth up to 25% of sales from 24% last year in Q3 despite a soft Mexican environment. Even thought they were not buying as much, more shoppers were coming through the door throughout the country.

More good news:

Target (TGT) today said that November same-store sales rose 1.1 percent, missing analysts' expectations of a gain of 3 percent and shares fell 4%. The reason? They may actually a see an earnings decline in Q4 if earnings in the quarter are not "impressive".

Taget and Wal-Mart have become an "either / or" proposition. You are either going to one or the other. Now that Wal-Mart seems to be getting its act together in the US, Target will face more headwinds. Now, do not get sucked into the % gain for the two companies. 1.5% for the $200 billion Wal-Mart is considerably more dollars than the $46 billion Target. When that volume of dollars is flowing to Wal-Mart rather than Target, it means two things.

1- Wal-Mart means value and that is what shoppers want this year.
2- Wal-Mart's renovated stores and improved electronics and clothing departments (the one here looks great) are bringing in shoppers who last year went to Target.

Today's report is very good news for Wal-Mart shareholders. The supertanker that is Wal-Mart has been doing a slow turn since early summer and today shows us it might just be coming around. Let's not get too excited though. We need a December confirmation to be sure. However, based on these numbers and the results to date, one ought to be very encouraged.

Subscribe in a reader


blogger templates | Make Money Online