The New York Times reports that Wal-Mart Stores, Inc. (NYSE: WMT) is expected to announce that year-over-year November sales have fallen for the first time in a decade. How can that be, you might ask, given the superlative numbers we've seen from Black Friday and Online Monday?
At first blush, it's easy to believe that Wal-Mart is simply too big and unwieldy to maintain the staggering growth trajectory, but a closer look reveals that Wal-Mart may be trying to change too much over too brief a period of time. One of Wal-Mart's pet strategies has been to upgrade its product lines, with mixed results. Expanding electronics to include plasma-screen TVs, cellphones, and other high-end gadgets has spurred sales in some stores. However, the attempt to spruce up its clothing lines has been a flop. Metro7, its designer women's clothing line, is not selling well simply because its sizes don't match those of Wal-Mart's meat-and-potatoes demographic.
In addition, Wal-Mart's decision to end layaway plans has also sent people elsewhere, and its attempt to refurbish stores has taken longer than planned.
Eventually, all this change can turn out to be a big positive for Wal-Mart, which has shown that it is not afraid to take risks to grow the company. It's too bad that all this has to happen now, during the all-important holiday season, but savvy investors might see a chance to load up on weakness.
Wal-Mart sales dip in November -- an opportunity to buy?
Posted Nov 30th 2006 1:01PM by Doug French
Filed under: Forecasts, Newspapers, Competitive strategy, Wal-Mart (WMT)
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Reader Comments (Page 1 of 1)
11-30-2006 @ 1:26PM
Billy Martin said...
Doug makes a very good point.I may buy a few more shares after reading his comments.
Billy Martin Henderson, Tex.