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Were Wal-Mart (WMT)'s August sales a fluke?

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Wart Stores, Inc. (NYSE: WMT), the world's largest retailer, stated yesterday that same-store sales rose 3.1% in August, which was higher than analysts were expecting. Wal-Mart officials gave partial credit to the life by saying that the chain has lowered prices to coddle back-to-school shoppers. As we all know, getting traffic in the door is half the battle, because many of those back-to-school shoppers will buy more once inside.

With analyst estimates hovering in the 1.6% increase range for the month of August, the chain's own estimate of 1% to 2% was also beat. Again, though, we have a situation that was created on the back of "lowering prices" -- and this is becoming Wal-Mart's temporary savior when it needs a sales lift. No mention about increasing higher-margin sales or creating more value for more customer segments beyond the price-sensitive. Will August's results be an anomaly until the holiday shopping season arrives, then?

I'm not sure I agree with this analyst's statement: "The best same-store sales gain in quite some time reinforced our belief that Wal-Mart is in the early stage of a reawakening and major changes for the better."

One month during a traditionally heavy shopping month (due to school) does not make a re-awakening. If Wal-Mart can get on the growth gravy train for the remainder of the year, however, this quote may turn out to be true. But, let's not count our chickens before they hatch.

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Last updated: November 25, 2009: 02:50 PM

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