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Investing

Wal-Mart (WMT): The “Recession Proof” Theory Leaves The Building

Photo of Douglas A. McIntyre
By Douglas A. McIntyre Updated Published

WalmartThe big theory after Wal-Mart (WMT) announced its June same-store sales was that the company was recession-proof. People were going from higher-priced retailers to Wal-Mart to save money because the economy was forcing them to do so.

Wal-Mart was to be the one large American company that stepped out of the way as the recession rolled on.

Analysts and investors were disabused of that theory. Wal-Mart same-store sales slowed to 3% in July, which was much less than Wall St. had hoped for.

Wal-Mart US revenue growth was a very modest 7%. If international sales had not moved up 17%, the report would have been truly awful.

The markets are now faced with the dilemma that the number of "safe" stocks is falling. GE (GE) went off the list some time ago, So did Microsoft (MSFT) and Apple (AAPL).

What is clear is the the recession is knocking off different companies at different rates of speed. Everyone is not getting crushed at once. The slowdown appears random now, not predictable by industry.

Wal-Mart may not have been the last man standing, but it was close.

Douglas A. McIntyre

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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