WALMART

In addition to Exxon's record profits, helping the market as well is Walmart saying it's same store sales will come in at the high end of it's 3-5% estimate at 4.7%. No doubt this is due somewhat to the redemption of gift cards, as they said sales were greater than expected last month. However, at 4.7% this is the best month they have had since a 5.9% showing in Mar of 04. Since last month was so dismal at 2.2% perhaps averaging the two months together is a more accurate picture of the underlying trend, and that comes in at 3.45%.
Walmart has been a weak stock since Feb of 04. Last week it got one upgrade and one down, by major firms. We all know that the low end consumer in the current economic climate is being hurt the worst, Walmart's bread and butter. What is not well appreciated is that prior to last month, they had been running positive comparisons in same store sales to last year for the past six months. This year may be the first year in 4, that they beat last years same store sales growth, albeit only marginally.
The question is, in a slowing economy, will they attract more move down consumers from higher end stores to make up for the shortfall in purchasing power of their traditional customer base. So far so good. Stay tuned.