Wal-Mart: The "Recession-Proof" Theory Leaves the Building

[marmar]

from 24/7 Wall Street:



Wal-Mart (WMT): The "Recession Proof" Theory Leaves The Building


The big theory after Wal-Mart (WMT) announced its June same-store sales was that the company was recession-proof. People were going from higher-priced retailers to Wal-Mart to save money because the economy was forcing them to do so.

Wal-Mart was to be the one large American company that stepped out of the way as the recession rolled on.

Analysts and investors were disabused of that theory. Wal-Mart same-store sales slowed to 3% in July, which was much less than Wall St. had hoped for.

Wal-Mart US revenue growth was a very modest 7%. If international sales had not moved up 17%, the report would have been truly awful.

The markets are now faced with the dilemma that the number of "safe" stocks is falling. GE (GE) went off the list some time ago, So did Microsoft (MSFT) and Apple (AAPL).

What is clear is the the recession is knocking off different companies at different rates of speed. Everyone is not getting crushed at once. The slowdown appears random now, not predictable by industry.

Wal-Mart may not have been the last man standing, but it was close.


- Douglas A. McIntyre


http://www.247wallst.com/2008/08/wal-mart-wmt-th.html

[Crunchy Frog]

1. But I thought that impoverishing everyone

was supposed to be good for big corporations. Isn't that why these guys support Republican policies? :shrug:

[TheDebbieDee]

2. Who's gonna buy their stuff if Americans can no longer afford to?

Nobody, that's who!

In their recklessness to sell us cheaper stuff made in China, they have displaced enough American workers to feel the pinch at the checkout counters.

[AndyA]

4. People who shop at Walmart are literally shopping themselves out of a job.

Foreign cars fill the parking lots. And tons of cheap foreign crap waits to be purchased inside.

Meanwhile, jobs over here are vanishing because we can't compete with countries like China unless our standard of living drops considerably. And all in the name of saving a few bucks.

People just can't see what they're doing by continuing to support this destructive cycle. :shrug:

[izquierdista]

5. Out of a job?

They're always hiring at the casinos and Indian bingo.....

[Javaman]

3. Bottom line, people can't afford to buy crap, whether it's expensive or cheap.

[Neshanic]

6. The made there, ship here model is falling apart. Oil will be 175 in January.

Cheap oil, cheap shipping.

Expensive oil, very expensive shipping from China.