Wal-Mart thrives in economic storm
The pieces are all falling into place for a great year for the nation's top retailer.
The ingredients are all there, and that's why analysts with Stifel Nicolaus have upgraded the stock to "buy." The company will succeed even in a slowdown in consumer spending, analysts said.
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Investors have clued into this for months now. That's why, after languishing for years, Wal-Mart shares have shot up 46% in the last year to close Monday at $74.28.
In some ways, Wal-Mart will see a repeat of 2008, a year in which Americans felt the pressure of high gas prices, food inflation and a crumbling housing market. This year isn't an exact repeat -- gas prices are low and the housing market is slowly recovering -- but there are other factors weighing heavily on consumers' minds. Some tax cuts are set to expire at the end of the year, and federal spending cuts may take place weeks later.
Wal-Mart did well in both years. Stifel analyst David Schick said his company's survey showed that more people are making weekly visits to the store. He upped his earnings estimate for the second quarter to $1.20 per share from $1.17 a share, and also hiked his full-year estimate to $5.09 a share from $4.97 a share.
He thinks the company's share price could rise to $83 in the next year.
Wal-Mart went into a spiral after 2008. It reacted to the recession badly and made some unwise moves aimed at grabbing wealthier customers that may be trading down. It cut its selection, rearranged its aisles and upped some prices. It was blindsided by the consumer shift to dollar stores for household goods. It continued focusing on super-sized bundles when shoppers couldn't afford them.
As a result, U.S. sales slumped for nine straight quarters. Management finally reversed that trend by making some key decisions, such as dumping its promotional pricing experiments and returning to its "everyday low pricing" model.
The new strategy is working. Gas prices are low, giving lower-income shoppers more cash to spend. Shoppers are very price-focused in this election year. And finally, Wal-Mart is benefiting from the management problems at JC Penney (JCP) and Sears (SHLD).
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Sam Walton is spinning in his grave. His body wasn't cold before his children were buying goods made in other countries and having them put made in the U.S.A. labels on them then got busted by 60 Minutes and people still went there to shop. WTF? It will be a frozen day in hell before I step foot in one of their stores.
I read an article about two weeks ago that said if you put the wealth of Sam Walton's children together it equals the lowest 40% of Americans....that's maybe around 100 million people. If we keep this up we'll be just like some other countries in the world. No middle class, just the filthy rich and dirt poor.
Wal-Mart = WE get wealthy while WE screw you! Thanks America :-)
Wal Mart is Un-American!!!! They force companies to export jobs. Just look how many items on their shelves are made overseas!!! I refuse to shop there.
The treatment of employees is criminal.
AND, you can't get out of WalMart. One checker with 38 check-outs. I once wrote WalMart to suggest that they pick up all the products that are left at the check-out, add up the total sale represented, and then they can see how many more checkers can be afforded.
One old business line says, "When people wan to give you money, don't make them wait."
Wal mart ( aka China Mart)
Yes, they may be doing that, but they are still a bunch of crooks and liars... live better "yeah right" Every time for the past 8 months I have gone in there to buy some sale items..
THEY ARE ALWAYS OUT OF STOCK! Or They do not have it period... Or they only put so muchof it out .. like one box or case for the whole day... Then you ask one of their stockers to check and see if they have any... The answer is ALWAYS NO...
Why is it .. you can go to the mexcan market and get tomatoes, potatoes and onions.. and other items like walmart sells (FROM MEXICO) for about 1/3 of the price?
So tell me that they are not screwing the american consumer? WHAT A JOKE OR SOULD I SAY THE JOKE IS ON YOU FOR BELIEVING THAT LINE ("walmart live better")
Because they pay Walmart wages? Or if you want more truth than hoopla: Because they pay slave wages? There is an oxymoron in sociology that states: For the rich to exist, there has to be poor people who supports them.
For capitalism to exist, there has to be ideology zombies that allow it to thrive and prosper while slaves go from bad to worse.
It's shameful that in the 21st century, this "Christian and democratic" nation allows this to happen, while at the same time, making fun of "socialism" where everybody is treated the same and all, not just the elite, the super rich, get liberty, freedom and the pursuit of justice. In true democracy that is not liberty, that is not freedom, that is not justice, but another rogue regime making the zombies believe in those things, just more virtual reality, more for show and tell than true reality.
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All hail the bull market, which ended the week with a big rally. But it also is starting to look a little like 1987, which suffered an epic blow-out.
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