Did Wal-Mart lose its status as a best of breed stock, on Thursday?
For months Jeff Macke has been telling you the only stock he likes in the entire retail sector is Wal-Mart . With the economy in a tailspin and looking worse by the day, Macke thought this company seemed almost destined to come out a winner.
After all, it only stood to reason that shoppers would seek out their low prices. And with so much under one roof, it had a convenience thing going, too.
But on Thursday Wal-Mart’s signature smile was anything but sunny. The nation’s number #1 retailer posted disappointing sales and they cut their outlook for quarterly earnings. (Sales were up 1.7% but analysts were expected 2.8%)
The news took investors by surprise and shares plummeted. According to CNBC’s Margaret Brennan it was a shock that they missed at all – not the degree to which they were off.
Wal-Mart blamed the shortfall on the weak economy and winter storms during the key holiday shopping season. The company also said weak sales of general merchandise had a greater negative impact than usual.