On the flip side, international sales were quite strong, rising 7.1 percent on a constant currency basis. Looking ahead, the discounter expects current quarter earnings of $0.95-$1.00 (inline with $0.97 consensus) on comps of down 1 percent to up 1 percent.
Q3 guidance was essentially in line with expectations. Still, most of the growth is from Sam's and international. And U.S. Wal-Mart (74 percent of sales)? Their low-end consumer is still stressed by inflation and unemployment.
It's fashionable to complain that WMT is the same price today as it was in 1999 ($51). True, but you could say the same about the S&P 500...it first hit 1,200 at the end of 1998! Close yesterday: 1,204.
And I'll take WMT any day over General Electric , which hit $50 in 1999 and is $16 today, or Microsoft (MSFT), which hit $50 in 1999 and is now $25, or even Cisco (CSCO), which hit $50 in 1999 ($75 the next year), $16 today.
2) Great report from Home Depot , which is up 3 percent on the news. The company topped estimates ($0.86 vs. $0.83 consensus) and boosted its outlook. Comps rose a better-than-expected 4.3 percent, significantly more impressive that the slight decline in sales its rival Lowe’s reported yesterday. The home improvement retailer also raised its guidance for the year to $2.34, above estimates of $2.30.
3) Saks falls 3 percent despite reporting a narrower-than-expected loss (loss of $0.05 vs. loss of $0.09 consensus). Comps jumped 16 percent in the quarter and margins improved on more full-price selling. The upscale department store sees comps growing at a mid to high single digit rate in the second half.
Some signs of deflation for the consumer? After implementing price increases to offset rising costs over the past year, will consumer food companies begin cutting prices amid the recent pullback in commodity prices and the declining consumer sentiment?
J.M. Smucker did just that this morning — slashing its coffee prices by 6 percent. Coffee commodity prices have plunged 21 percent since May, but are still down about 40 percent from a year ago.
4) Buybacks continue: Cliffs Natural Resources announced a 4 million share buyback (about 6 percent of the float). Correction Corp of America (CXW) a $150 millon buyback, Forest Labs (FRX) a $350 million buyback from Morgan Stanley (about 3 percent of shares outstanding); Myriad Genetics (MYGN) a $200 million buyback; WebMD Health (WBMD) a $75 millon buyback.
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