From here (h/t Mega at iTulip). The risk of a double dip is increasing, I think.
has a problem: Its typical shopper appears to be tapped out.
The world's largest retailer reported $112.8 billion in worldwide revenue in its fiscal fourth quarter, up 4.6% from a year earlier. But Wal-Mart also said U.S. same-store sales fell 1.6% in the period and noted that traffic in U.S. stores fell slightly. Same-store sales are considered an important measure of a retailer's health.Wal-Mart's financial results unnerved investors, outweighing plenty of good news in the Bentonville, Ark., company's quarterly report. Wal-Mart has been slashing expenses and inventory, and international sales growth remains strong. Earnings per share last quarter were $1.17, beating Wall Street's estimate of $1.12.
Still, Wal-Mart shares fell 1.1% after the quarterly results were announced on Feb. 18.
One explanation for sales weakness is deflation. The company said prices for groceries and consumer electronics continued to fall, causing customers to spend less on each shopping trip.
The tough economy and high U.S. unemployment are also playing a big role. U.S. consumers are still feeling squeezed, Wal-Mart Chief Financial Officer Tom Schoewe told reporters. "We see the influence of the paycheck cycle as pronounced now as it's been in the past," he said, according to Bloomberg News.
Tuesday, July 6, 2010
Wal-Mart taking a beating
Seems the American consumer's spending spree is slowing: