jerico

Wal-Mart's Ten Year Record: The Dangers of Overpaying for Growth

Very well written article! Great explanation of how business success may not mean share appreciation.

One thing to watch involves the unknown dynamics of reaching almost half a trillion dollars in sales for Walmart. Does the law of Big Numbers and economy of scale result in an unexpected profit boom?
Another involves the rapid international growth which may or may not be a wild card in total company earnings per share in the next few years. As the international sales near matching U.S sales, how do the exchange rates impact the bottom line?

Stay tuned.

Losing Patience with Target as Its Slide Continues

Target has to decide to try to seriously compete with Wal-Mart, or if it is going to take share from more up-scale firms. It would be a mistake to try to out discount Wal-Mart. They would be better off going for "better" goods, not cheaper goods.

Perhaps they should merge with Whole Foods and go for the higher income crowd.

If they try to match Wal-Mart, they are bear hunting with a stick.

Three Thriving Companies: Wal-Mart, Apple, Apollo Group

Wal-Mart became #1 through not being taken seriously by the big boys in retail in the 70's and 80's. You are right that most people live close to a big Wal-Mart store, but they don't live close to a Market Place store (new format). The new, smaller, super-C stores are a growth opportunity.

Also, your stats only address the U.S.A.

Fully 33% of Wal-Mart is outside of the U.S. now, and in a few years this will become 50%. They just bought a new chain in Chile. Wal-Mart as a whole is still a growth company, and soon only half of it's competition will be in the U.S.

Sam Walton Is Rolling in His Grave

If, in the U.S.A., those who did not work did not eat or if those without money got no health care, then the normal supply and demand principles can be relied up.

Poor people simply starve and poor people die of treatable illnesses. Eventually, there would be no poor people and no problem with health care. Kind of a Darfur sort of deal.

That is not the way it is. Poor people neither starve nor go without health care, they just don't pay for it. Churches, civic organizations, fraternal orders, health care providers and the various governments handle the needs as charity cases.

It is a cumbersome, disorganized, redundant and dollar-dumb jigsaw puzzle of a system.

An organized system administered by government or contractors could do more with less and reduce the cost to hospital emergency rooms hence lowering or containing the cost of treatment.

In my opinion, Lee Scott was right. Only the federal government controls interstate commerce. A workable system must by law must be a federal system so all the states have the same rules, same funding and same policies.

Otherwise, you make no real progress.

Wal-Mart Kept Estimated $60 Million in Sales Taxes

Rules are rules and unlike the wall street elite, most people and businesses have to play by them. Wal-Mart is playing by the rules and will change if the rules change. Too bad everyone and every business does not.

Every dollar Wal-Mart earns other than through retail margins, are used to keep prices down.

Wal-Mart: The Best Play in This Market

Great summary! Wal-Mart is ahead of the curve regarding preparing for and dealing with recession. They dance with the one who brought them to the dance. They work to serve the low to middle income customer. The number of low to middle income customers, or those who perceive themselves as such, have increased in the last couple of years. Therefore, the customer base they have designed their business around is growing.

Wal-Mart: Can Marketing Influence Share Price?

George, The stock is up 34% because it was undervalued to begin with.

In the next few years, Wal-Mart will be the big player in Brazil, China, and India. That creates a couple of BILLION new customers. We are talking incremental business to the $400,000,000,000.00 plus in sales in fy 2009. With any luck, WMT will be doing a Trillion Dollars in sales in 10 years, half of it in various international currencies. Sounds like a low-risk growth company to me.

Wal-Mart Meets July Sales Projections, Why the Unhappiness?

Well Said Todd. A 9.4% net sales increase is almost 100 Million a day in sales jump. This increase of 100 million dollars a day is more than most businesses in the world gross in a year, 10 years, or a hundred years.

Looks like Walmart is going down the tubes to me.

Confident in Wal-Mart - Contrary to Market Pessimism

Good article. Walmart's is in the right place at the right time for the current economic conditions. Of course, they have been in the same place for almost 50 years. Recently, stores have been improved, employee benefits and practices have improved, and they are still setting the benchmark for logistics excellence.

They are opening new Supercenters in Michigan, Illinois, and the industrial north that were previously hostile territory. Even California is slowing opening up to Walmart. Union Supermarket tuff has fought Walmart with everything but armed resistance. Industrial jobs can be exported when unions destroy a company's competitiveness, retail and service unions are the only ones that can potentially survive. It is hard to export grocery store jobs to China, no matter how high you drive up the cost of food to the public.

In the part of the country where unions control the labor and hence the cost of operating food stores, the prices were quite high. The average citizen has responded positively to big drops in food prices when Walmart comes to town.

Walmart has continued growth opportunities in North America. Meanwhile, the international operations are booming with double-digit growth.

Yeah, I think they will be around for a while and make more money every year for the next 50 years.

Wal-Mart Looks Slightly Overvalued

I don't know for sure, and neither does anyone else, if any normal matrix or measurement is valid when an international company hits sales of half a trillion dollars.

Since it never happened before, the negatives and positives of that size and mass is unknown. It is almost certain that assumptions made with "normal" tools are probably wrong.

Therefore, Walmart is probably remarkably over-valued or tremedously undervalued. Hope that clears it up.

Starbucks Tells Walmart:: "Here, You Take Them."

Well Trader Mark, you are probably right. Wal-Mart probably will create many times more than the 12,000 jobs lost by Starbucks. Good thing for those Baristas!

By the way, a little research will show Walmart has a huge staff of professional trades as well; Legal, Accounting, Medical, Marketing, Engineering, etc. Little place called Bentonville, Arkansas. Their website has hundreds of openings for these positions.

They take them all from high school dropouts to PHD's and give them an opportunity. What a horrible thing.

Jason Busch on Wal-Mart's Sustainability: (Still) Missing the Point

Right on Tim!

Wal-Mart has moral obligation as on of the largest economic forces in the U.S. to lead. As it lead in hurricane Katrina relief, as it lead to decrease prescription drug costs, it is leading in sustainability efforts. If Wal-Mart does not push packaging reduction, energy use reduction, and cost-cutting it won't matter much if smaller companies try or not.

History will record that these efforts stimulated the best minds in retail, manufacturing and engineering to act agressively to reduce global warming.

I just wish Wal-Mart was in the oil business. Gasoline would be a lot cheaper.

Wal-Mart Keeps Growing Globally

Wal-Mart has begun operations in India, looking seriously at Russia and Chile. Never count out Australia, Indonesia, perhaps South Africa. Everyone needs to save money and live better.

Time for Rethink on Discount Retail?

Wal-Mart was being cautious and conservative in its outlook for the 2nd quarter. The market reaction was a classic "sell on the news" move, nothing more. Smart money has made 20% profit on this stock in the last few months. Smart money should buy on the dips, because a disproportionate share of those rebate checks are going to be spent for food and other such staples. Wal-Mart and Sam's clubs are the place to stretch those dollars. If we take a look at 22% growth in the international business, we have a pretty positive kicker. This is another easy 20% upside to this stock by September 08.

Is Wal-Mart a Buy or is Upgrade Just Noise?

Ordinarily, the recent run-up in price might indicate a "hold" rather than a "buy", however, the next few months results should kick WMT up 10 to 15%.

The rebate checks will be spent at WMT more than any other retailer, the previous rebate a few years ago proved this. Same store sales will go up more than expected and the next two quarters should be very positive year over year.

If a return of 15% in 6 months is enough to make you happy, WMT is still a buy.