August 17, 2005

Wal-Mart's Data

When surpassing expectations is not enough:

LITTLE ROCK, Ark. -- Wal-Mart Stores Inc. said yesterday that its second-quarter profit rose 5.8 percent, beating Wall Street expectations. But revenue fell short of forecasts as its customers continue to struggle with higher gasoline prices.

For the three months ended July 31, the Bentonville-based Wal-Mart earned $2.8 billion, or 67 cents per share, up from $2.65 billion, or 62 cents per share, in the same quarter a year before. The company reported sales of $76.8 billion for the quarter, up 10.2 percent.

Shares of the Dow industrial company fell $1.53, or 3.1 percent, to $47.57...

Still, the impact of higher energy prices is not linear, and those who have hedged against them, or have leaner operations, can gobble up more market share:
Wal-Mart's chief financial officer, Thomas M. Schoewe, said utility expenses rose $100 million and fuel costs were up $30 million in the quarter.

Still, the case can be made that Wal-Mart's dogged low-price model helps it run counter to economic cycles - making it a more compelling spending destination for consumers with tight budgets.

Also interesting, perhaps best seen in the light of people not making wild extrapolations from marginally useful data, is the end of the weekly sales reports:
Wal-Mart also announced yesterday that starting in February it will switch from its schedule of weekly sales updates to a quarterly report providing guidance on earnings and sales.

"The weekly updates were a little tedious and not terribly relevant," said Todd Slater, an analyst at Lazard. "They generally don't measure trends very well."

Good news for ALP is that The New York Times apparently believes that Wal-Mart's trademark is "every day low prices", not "always low prices":

The company aggressively squeezes suppliers and wields its overseas buying power to pass on its trademark "every day low prices" to consumers.

Posted by Kevin on August, 17 2005 at 01:55 PM