Filed under: Earnings reports, Wal-Mart (WMT)
Wal-Mart Stores Inc. (NYSE: WMT), the retailer that keeps on chugging along nicely in the U.S. economic downturn, is set to release its Q2 numbers Thursday. Expectations are for a profit of 83 cents per share on sales of $101.6 billion, an increase from the year-ago quarter earnings of 76 cents per share and sales of $93 billion.
As I’ve been saying since 2006, Wal-Mart’s effort to draw more affluent and middle-class customers through its doors was no match for its continued message of low prices. Customers, now more than ever, are lining up all day (and night) at the local Wal-Mart to buy everything from cheaper gas to low-priced milk, bread, processed foods and flat-panel televisions.
When U.S. sales chief Eduardo Castro-Wright announced that the retailer was going to partially abandon its Always Low Prices moniker and go after shoppers who purchase higher margin goods, I had a feeling that Wal-Mart’s entire history of competing only on price would win the day, regardless of the strategy change. Then the housing crisis hit, gas prices went nuts, the auto industry saw a huge sales downturn — particularly in large trucks and SUVs — and ’staycation’ became part of the language.
Wal-Mart changed its tune last year and now sports a new logo and tagline that reads Save Money. Live Better — and that’s pretty direct in its meaning. Wal-Mart is helping the average American family save money on all purchases so it can spend the savings elsewhere, like gas and school supplies. Is Wal-Mart your friend? That’s the image it wants to present, and when it releases its Q2 numbers, it should easily meet financial expectations as it goes for half a trillion in annual sales in the next few years.
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