Wal-Mart (WMT) Gets Stunned By International

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No matter how badly the retail industry was in December, Wal-Mart (WMT) still managed to post improved same-store sales of 1.9%. But, that was the only good news the company could manage.

The world’s largest retailer cut its earnings estimates for Q4 to $.91 to $.94 from its previous figure of $1.03 to $1.07.

The champion of Wal-Mart’s earnings gains over the last four years knifed it in the back.

Wal-Mart International has turned in sales improvement of 15% to 20% on a very consistent basis. In December of last year, that number fell by 10.4% to $10.7 billion. For the entire company, revenue was flat at $47.5 billion, which means that Wal-Mart US carried all of the load.

Wal-Mart’s two core overseas regions, Mexico and China, turned in lackluster and disappointing results.

The numbers raise the question of whether the miraculous turnaround at the company may be slowing. It has always been assumed that the US, which has posted very modest growth over the last few years, would be the largest challenge that the firm had to overcome.

If international operations stay weak though 2009, Wal-Mart simply cannot do well.

Douglas A. McIntyre

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