Wal-Mart's Seiyu unit to post first-half loss?

Just like its loss in 2006, Wal-Mart Stores Inc.'s (NYSE: WMT) Japanese Seiyu unit (53% owned by the retailer) is being seen as having a loss in the first six months of 2007 on the back of lagging sales. Instead of posting a profit, the international Wal-Mart subsidiary will post a loss and bring into question Wal-Mart's fledgling international operations once again. Seiyu reports actual results on August 14.

Weaker-than-expected clothing and electric appliance sales are to blame here according to rampant speculation. As such, Wal-Mart's thinking of making up for problems with downtrodden U.S. sales using international divisions has hit a black-eye moment here. Sure, many of the global retailer's international operations are doing well, but not this one. Let's hope Trust-Mart in China and Bharti in India fare a little better throughout 2007.

Seiyu's loss of $17-25 million for the first six months of 2007 recap a startling 1% same-store sales drop from the year-ago period. What caused this minor plummet? In addition to the lower-than-expected sales, weather was named as a reason for lowered sales. With Wal-Mart's apparel chief recently resigning from the company, perhaps clothing sales will recover some time in 2008.