This is a classic. So just last month when Wal-Mart came in at 3% comps and people were inexplicably disappointed and then guided for 1% to 2% for August, I said “Anyone want to bet Wal-Mart is lowering projections to avoid the current scenario next month? Now Wall St. will lower “estimates”, Wal-Mart will beat them and everyone will be happy…..strange stuff.” Guess what happened today?
Wal-Mart (WMT) said Thursday sales of groceries and back-to-school products helped its August same-store sales rise 3 percent, beating expectations.
Sales in stores open at least one year, a measure known as same-store sales, rose 2.8 percent at Wal-Mart Stores and 4.2 percent at Sam’s Club for the four weeks ended Aug. 29. Analysts polled by Thomson Reuters predicted a 1.6 percent rise.
Including fuel, the world’s largest retailer’s total same-store sales rose 3.5 percent. Total company sales rose 9 percent to $30.67 billion in the four-week period.
“The underlying business performance for Walmart U.S. continued to show strength and the improved relative performance has resulted in market share gains,” said Eduardo Castro-Wright, Walmart U.S. president and chief executive, in a statement.
Isn’t this just great? Same number but because they issue different guidance, people were upset before and are thrilled today. Maybe Sears’ (SHLD) Eddie Lampert and Berkshire’s (BRK.a) Warren Buffett are onto something by not issuing guidance.
It also goes to show the most of Wall St. simply bases their expectations on those set by the company.
Oh yea…the company said it expects September same-store sales to rise 2 percent to 3 percent. Now if we come in a 3% again, we’ll “meet the high end of expectations” and that will be good news. 4% and people will be dancing.
Such nonsense…
Disclosure (“none” means no position):Long WMT, SHLD, none
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