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From Bloomberg: Walmart Earnings Top Analysts' Estimates on Cost Reductions; Revenue Drops

Aug. 13 (Bloomberg) -- Wal-Mart Stores Inc., the world's largest retailer, reported second-quarter profit that exceeded some analysts' estimates after managing inventory to lower costs. Comparable-store sales trailed the company's forecast.  This is a problem, dear readers. Walmart has the most volume, the lowest source costing, and the most clout in the physical retail universe. Even they are missing on the revenue front., on their OWN forecasts, not just the sell side. This is where everyone goes to SAVE money. The revenues did not move to Saks Fifth Ave! Cost cutting is a one, maybe two quarter fix, and that's it! Why is no one bearish on this news??? Notice the MSM spin to the positive.

Net income totaled $3.44 billion, or 88 cents a share, the Bentonville, Arkansas-based company said today in a PR Newswire statement. Analysts projected 86 cents, the average of 22 estimates compiled by Bloomberg.

Walmart said it will accelerate efforts to reduce costs. It cut prices on its Sam's Choice black angus beef patties, baked beans and flat-panel televisions to lure consumers grappling with shrinking paychecks and the worst unemployment since the Great Depression. Revenue in the three months ended July 31, including membership income, fell 1.4 percent to $100.9 billion as the stronger U.S. dollar reduced the value of overseas sales.


"Walmart has been using lower prices to drive traffic," Deborah Weinswig, a Citigroup Inc. analyst in New York, told reporters on a conference call Aug. 10. She recommends holding the stock and said the company has "gained a lot of new customers in this environment."

Sales at U.S. stores open at least a year fell 1.2 percent after the retailer had forecast them to remain little changed or rise as much as 3 percent.

Walmart rose 47 cents to $50.51 yesterday in New York Stock Exchange composite trading. The stock has declined 9.9 percent this year.