Not Even Wal-Mart Is Spared

If Wal-Mart (WMT) is the “canary in the coalmine” regarding holiday retail sales this past year, the air’s not looking too good down there. The mega-retailer has cut its 4th quarter earnings guidance following dismal 2008 holiday shopping season results.

Other retailers, such as The Limited (LTD) and The Gap (GPS) also have reduced their outlooks, but Wal-Mart had been widely regarded as one company that would be able to retain at least a modicum of success during the very serious current U.S. economic crisis. Now that the lowest priced of the Big-Box stores is lowering expectations, what chance does anyone else in the retail sector have?

Wal-Mart’s news early today caused WMT stock to open down around 8%, and shares have not gained much, if any, momentum since then. Not even President-elect Obama’s speech about the need for a $775 billion stimulus package could resuscitate Wal-Mart shares today.

Analyst estimate revisions for WMT’s 4th quarter had been slipping downward as of late, but even the latest Zacks consensus estimate of $1.06 per share is far beyond the company’s new guidance, which is not expected to exceed 94 cents per share.

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Comment by Ackert

2009-01-09 16:30:12

Walmart doing poorly is actually good for America. They get so many of their products from China (approx. 70%) and drown out so many local economies, that while consumers may save a couple of pennies there, Walmart has a net negative effect on the U.S. economy.

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Comment by Donald W.

2009-01-09 18:38:23

From what I have seen..if Walmart is doing poorly then I feel badly for the rest of the retailers because the shorts will have no mercy. Hedge Funds must make there money in any direction the market moves and with leverage…ouch, ouch, ouch.

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