With Wal-Mart Stores Inc. (NYSE:WMT) turning in disappointing November sales figures yesterday -- a 0.5% decline in same-store sales -- there are many questions of the hour when it comes to the world's largest retailer.
What's important about this is the fact that Wal-Mart's November same-stores sales results demonstrated its first monthly sales decline in a decade -- and this is the holiday season no less.
Does the rest of the holiday season look glum for Wal-Mart? Possibly. Wal-Mart said that it expects December sales to rise 0% to 1%, which falling short of Wall Street's expectations for a 2% increase. Ouch -- expectations and projections being off by an entire percent? With Wal-Mart's volume, that is no small matter at all.
After WMT stock hit $50 per share just over a month ago, shares now sit at $45.65 (Friday midday) following the bad news of the 2% decline in November's sales.
As expected, though, Wal-Mart reported that it racked up double-digit comparable-store sales growth in its pharmacies, thanks to its new $4 generic prescription drugs program. I still think CVS Corp. (NYSE:CVS) and Walgreen Co. (NYSE:WAG) will feel the heat next year as Wal-Mart steals quite a bit of prescription drug business.
Wal-Mart also said it saw food sales increase by 5% in November based on more organic offerings and lower prices. I am not sure I believe the organic part ... yet.
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Reader Comments (Page 1 of 1)
12-01-2006 @ 2:45PM
Bob Little said...
Let's not forget the being down .5 percent from last year is still alot of billions and billions of dollars that are spent in the world's largest retailer. I believe that you could add up the top two or three and still would not have the volume that Walmart has!!!!
12-01-2006 @ 3:31PM
Victoria said...
In my opinion Walmart's sales dropped when they decided to close layaway company wide comming into the Christmas Season. Kmart still has layaway I bet there sales are up as a result of Walmart's bonehead decision
12-01-2006 @ 3:41PM
kendra owens said...
Maybe Wal-Mart sales are down because of their political involvements regarding gay marriage. They are supporting it with their $$, products and even put an executive on the advisory board to advance same sex marriage! I quit shopping there when I found this out about a month or so ago and I am sure others have as well.
12-01-2006 @ 3:56PM
Michael said...
Wal-Mart sales are not down due to backlash from the support of same sex marriage, that is a ridiculous statement.
Wal-Mart sales are down because the average American spender is loaded with debt and hearing about how the slowing housing market possibly resulting in a nation wide recession. The fear of a recession during a time where people are so deep in debt is being felt in Wal-Mart sales which act as a barometer for the general consumer spending situation across all of America.
12-02-2006 @ 10:52AM
DR. RON MORLEY said...
I AM SO SICK AND TIRED OF EVERYONE PICKING ON WALMART. UNIONS ARE PUSHING TO UNIONIZE THE EMPLOYEES AND WALMART RESISTS WHICH IS THEIR PEROGITIVE. LOOK AT THE AIRLINES UNIONIZED ALL NEARLY BANKRUPT. LOOK AT THE AUTOMOTIVE INDUSTRY ALL ARE UNIONIZED ALL NEARLY BANKRUPT. WALMART IS PROVIDING JOBS AND SUPPORTS THE LOCAL COMMUNITY. GIVE THEM SOME TIME THEY WILL BOUNCE BACK AND THEIR STOCK WILL GREATLY IMPROVE IN VALUE. RON
12-04-2006 @ 1:17AM
Troy Blauser said...
I think it's pretty clear the reason behind announcing their $4 generic program every couple
weeks or so. Walmart's sales are suffering so they
need to bring some "good news" to this sad situation. This time next year their sales will continue to be on the decline and the drug store stocks like cvs and walgreens will be trading at all time highs.
12-10-2006 @ 11:15PM
wearethinking.com said...
Gay politics are the culprit. Walmart has incurred the wrath of the evangelical demographic, led by groups like the American Family Association and Operation: Save America, when it chose to cater to a controversial, miniscule consumer group that doesn't even prefer their wares, and thus alienated the traditional, often God-fearing family unit. These families that Walmart has offended are the same evangelicals that determine presidential elections. It's not a slump in real estate-that's been going for some time. It's the sudden and recent espousal of a highly unpopular political agenda. One can only wonder why Walmart would jeopardise so much for so little.
12-22-2006 @ 8:36AM
Patrick said...
WMT intentionally sold items at a loss to drive others under...ie:K-MArt...now some retailers are doing it to WalMArt on certain items...BestBuy etc...this has never happened before...add in the fact they did away with layaway..which was an imortant service to many WMT shoppers...given the demographic of their lower income customer...then add in over saturation in the market place...online sales increasing....dump this pig