When all you read is gloom, turn here for a much different perspective.

Tuesday, February 17, 2009

More Evidence of Retail Growth From Walmart

Last week the government released retail sales numbers and they showed a 1% jump in retail sales.

Although it surprised many, it came as no surprise to Walmart management. The week prior, they had already reported that their January sales jumped 1% month over month. (That's a 12% annualized clip.)

You may know that Walmart accounts for about a quarter of the total $1.75 trillion annual top 100 retail market. So it is not insignificant to the whole sector when they post their results and forecasts... which they did early Tuesday morning.

For the three-month period that ended Jan. 31, Walmart reported net income of $3.79 billion, beating analysts' expectations. Their quarterly sales increased to $108 billion. Their annual sales year over year increased 7.2% to $401.2 billion.

So will Walmart be surprised about continued growth in their 23% take of the retail segment?

"Our performance relative to competitors was exceptionally strong in the fourth quarter," said Wal-Mart's new CEO, Mike Duke. "We expect this momentum to continue."

Given Duke's remarks, I doubt the management team will be surprised by their continued growth. Why? Because not only do they see continued growth in their business, but like 43 Fed economists it is highly likely that Walmart top brass sees an overall return to US economic growth by summer.

Disclosures: No positions.


  1. Any explanation for why the stock market isn't reacting positively to the good news? Is it that the big banks (not regional) are still in trouble and won't lend?

  2. To Anonymous: Because you and I, and our friend Mr. Mast, are still outnumbered 1000 to 1 by very scared people unfortunately (and by some not-so-scared yet less-than-reputable doomers as well).

    Time needs to work its magic I'm afraid.

  3. I like what Buffett wrote in his 1996 letter:

    "Your goal as an investor should simply be to purchase, at a rational price, a part interest in an easily-understandable business whose earnings are virtually certain to be materially higher five, ten and twenty years from now. Over time, you will find only a few companies that meet these standards - so when you see one that qualifies, you should buy a meaningful amount of stock. You must also resist the temptation to stray from your guidelines: If you aren't willing to own a stock for ten years, don't even think about owning it for ten minutes. Put together a portfolio of companies whose aggregate earnings march upward over the years, and so also will the portfolio's market value."

  4. Thanks Anonymous(1) and Anonymous(2)...
    Totally agree with your analysis 2.



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