Wal-Mart misses on sales growth

Wal-Mart Stores, Inc. (NYSE: WMT) reported today that it missed its February sales growth estimates. Sales at stores open at least one year rose 0.9%, short of its own estimate of 1 to 2% and average analyst estimates of 1.7%.

Wal-Mart blamed the usual suspects -- bad weather and weakness in its home and clothing lines. But it's worth asking if there are deeper problems here. In particular, you have to wonder if the weakness in Wal-Mart's sales growth is an early sign of the subprime mortgage implosion.

Barry Ritholtz at The Big Picture -- an excellent stock and economics blog if you haven't seen it -- argues that sales weakness at virtually all of the major box stores is related to much bigger macro-economic problems. In short, the famously indebted American consumer may finally be giving up in the battle to endlessly expand consumption.

In 2005, Americans saw their national savings rate fall into negative territory. This hasn't happened since 1933 -- in the midst of the Great Depression. This is part of a larger pattern of rising economic inequality, in which income gains go to the top 20% of the population while the rest of the population gets increases in debt. And it's not the top 20% that's shopping at Wal-Mart -- it's the people toward the bottom, who are having more and more trouble keeping up. They're also the ones who will suffer the most as $1 trillion in subprime mortgages resets over the next few years. Higher mortgage payments means buying less at Wal-Mart and less money for virtually everything else. It's not a pretty picture, especially for investors in American mass market retailers.