Is This the Best the Retail Sector Can Do?

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 |  Includes: HD, LOW, WMT, XRT
by: James Quinn

Well, the three big mega retailers reported sales and profits in the last 24 hours for their second quarters. The headlines blare good news. Let’s see. I worked in retail for 14 years. The only thing that matters over the long run are SAME STORE SALES. Here are what these behemoths reported:

Wal-Mart (NYSE:WMT): U.S. 1.8% comparable store sales Decline

Home Depot (NYSE:HD): U.S. 1.0% comparable store sales growth

Lowes (NYSE:LOW): U.S. 1.6% comparable store sales growth

Now for a little perspective. Wal-Mart’s same store sales last year for the same quarter were -1.2%. Home Depot’s same store sales last year for the same quarter were -6.9%. Lowe’s same store sales last year for the same quarter were -9.5%.

Now for even more perspective. The comp US store sales for these three retailers in 2008 were:

Wal- Mart: +4.5%

Home Depot: -7.9%

Lowes: -5.3%

Here is the true picture of our best retailers since 2007:

2008 2009 2010 % Change
2007 2008 % Change 2009 % Change 2010 % Change from 2007
Wal-Mart $100 $104.5 4.5% $103.2 -1.2% $101.4 -1.8% 1.4%
Home Depot $100 $92.1 -7.9% $85.7 -6.9% $86.6 1.0% -13.4%
Lowes $100 $94.7 -5.3% $85.7 -9.5% $87.1 1.6% -12.9%
Click to enlarge

Sales at two of these mega-retailers are still down double digits from levels of three years ago. Wal-Mart is essentially flat. Over this same time inflation is up 4.8%, so on a an inflation adjusted basis all of these retailers are way down over 2007.

Don’t believe the improvement hype being spewed forth by the Wall Street shills.

Disclosure: No positions