This can’t be good:
WSJ: "Wal-Mart Stores Inc. expects December same-store sales at its U.S. locations to show growth of 2.2%, at the low end of its previous guidance of 2%-4%, despite aggressive discounts and marketing this holiday season.
In its weekly prerecorded sales update Saturday, the world’s largest retailer said general-merchandise sales were stronger than food sales for the week ended Friday. The stronger general-merchandise sales — a reversal from previous weeks — likely indicates Wal-Mart saw a strong flow of gift-card redemptions in the week after Christmas.
Even so, the 2.2% gain in same-store sales, that is, sales at stores open at least a year, is Wal-Mart’s lowest December gain in five years." (emphasis added)
The wild "card" (pun inteded) is Gift Cards: They don’t get recorded as revenue when sold — only when they are redeemed. "Wal-Mart gift-card sales beat expectations this season, is counting on a big sales boost in January from gift-card redemptions."
Still, its hard to imagine that enough Wal-Mart GIft Cards were sold to make up up this shortfall.
UPDATE: January 2, 2006 10:13pm
This Wal-Mart disappointment is a surprise to me. Even though I was looking for only 3-4% Holiday sales increases (across all retailers), I thought Wal-Mart was going to do okay. And, I was on the low end of Wall Street’s estimates.
The Wal-Mart surprise sent me back to look at two reent articles I bookmarked on Holiday Retail ’05, both from December 27.
How are these two for conflicting data? :
The only good news — from an analytical perspective, anyway — is that this is another bearish data point confirming the bigger picture we’ve been painting.
Wal-Mart Sees December Sales At Low End of Its Forecast
KRIS HUDSON and GEORGE STAHL
THE WALL STREET JOURNAL, January 2, 2006 5:22 p.m.
Wal-Mart’s Holiday Growth May Be at Low End of Forecast
NYT, January 2, 2006