Toyota Motor Corp. (NYSE: TM) and Wal-Mart Stores Inc. (NYSE: WMT) today showed yet again that the economy remains deeply troubled.
The automaker reported July sales of 197,424 vehicles, down 18.7% from last year. Monthly Lexus sales dropped 24.6% to 22,182. Passenger vehicle sales fell 5.4% despite a strong showing from its hybrids and other fuel-efficient models such as the Corolla. Not surprisingly, light truck sales slumped 34.3%.
As the Wall Street Journal noted, "The weak results are a rare setback for Toyota, whose rapid expansion in sales and profit growth this decade once appeared to be immune to hardships facing other auto makers." The Big Three automakers, though, would give their left arms for results that were as "bad" as Toyota's.
Meanwhile, Wal-Mart and other discount stores are continuing to reap the benefits of the stimulus checks. The company's flagship stores reported same-store sales, excluding fuel, rose 3%, while Sam's Club grew 3.5%. Wal-Mart, which had forecast sales growth of between 2% and 4% in July when it raised its fiscal second-quarter outlook, sees growth tapering off in August to 1% to 2%.
"With the end of the stimulus checks, we know consumers are spending more cautiously,and we continue to see a pronounced paycheck cycle at the end of the month," said Eduardo Castro-Wright, Wal-Mart US President, in a statement.
The question for policymakers is whether having a second stimulus bill will give companies such as Toyota and Wal-Mart a boost to their bottom line. I have to wonder whether a new government handout is needed given that the first one did not do as much good as many had expected.
Then, what happens next? A third stimulus bill? A fourth one?
Last updated: February 13, 2012: 11:13 AM
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