Wal-Mart Stores, Inc. (NYSE: WMT) blasted past quarterly expectations this morning when it reported 87 cents profit per share before the market opened this morning. The consensus had been $0.83 per share with $101.6 billion in revenue. Final figures came in at $102.67 in revenue for the retailer's second quarter -- almost $10 billion over the year-ago quarterly figure of $93 billion.It's another example of how many Americans are hiding out at Wal-Mart day after day looking for cheaper prices on just about everything they buy. But that's not all -- international sales skyrocketed as well, seeing a 17% lift over the year-ago quarter compared to an 8.5% lift in the U.S. In addition, international profit spiked to 16.5% as well.
So, add up Wal-Mart's tagline Save Money. Live Better, the federal tax stimulus checks and the rising gas and food prices and there you have it -- Wal-Mart benefits from all. Although gas prices have trended downward in recent weeks, fuel is still expensive.
With Wal-Mart's failed attempt to lure more higher-spending (on higher-margin goods) customers, the company is falling back on its strength: low prices. The timing has been perfect for the retailer. But one has to ask: is fuel and commodity prices ever go back down to 2006 levels (yeah, right!), will customers return to their pseudo-affluent lifestyles and move out of Wal-Mart?
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Reader Comments (Page 1 of 1)
8-14-2008 @ 11:00AM
roudy11z said...
A very good fair and balanced view by Brian. I still feel comfortable with the job Wal-Mart is doing for its customers as well as its shareholders such as myself.The slow economy makes it even more impressive that Wal-Mart is still doing well.
RoudMan
8-14-2008 @ 2:19PM
jrg said...
That great sucking sound you hear right now is walmart killing small businesses. They are up and everyone else is contemplating how bad the rest of the year will be. If you are satisfied with them you should take a closer look at your morals and what their business plan has wrought on the U.S. unemployment, underemployment, lack of health care, loss of manufacturing,housing market gone, people and businesses are going bankrupt in record numbers up, we are headed to hell in a handbasket made in china and bought on borrowed money from china. And we got it all at walmart. What a great price!
8-14-2008 @ 9:06PM
Brockage said...
Great news that a retailer is catering to those of us needing a bit of help in challenging times, and then rewarded in the stock markets. Wal-Mart's success is good for customers, associates, investors and middle America - the people who "play by the rules" as President Clinton used to say.
Way to go Wal-Mart.