Wal-Mart’s sales may not rebound at all. At least not in the US during 2007.
The chain is blaming store remodelling and a large new line of women’s cloths for much of its troubles.It is like a killer blaming the gun.
Bear Stearns, which likes Wal-Mart’s stock told The Wall Street Journal that "It’s our belief that same-store sales may remain under pressure for the first half of 2007." Ouch.
Although Wal-Mat rival Best Buy does not generate the same sales per square foot that Wal-Mart does, it has entered urban markets earlier and may hinder Wal-Mart from following.
Wal-Mart’s stock may not reflect a troubled 2007. It trades at $46, but was as low as $43 in July. After a brief run-up during October, November and December same-store sales estimates have bought it to its current price.
More bad news could pressure Wal-Mart’s stock toward $40, and, if early 2007 results are poor, the stock could slip into the $30s.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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