Wal-Mart May Ring Up Rare Win

SAN FRANCISCO -- The long and heated rivalry between Wal-Mart (WMT Quote) and Target (TGT Quote) is starting to get interesting.

For years, Target has been the trendy superstar, blowing past its larger, lumbering rival in both sales growth and profits. But holiday sales reports from each chain -- due Thursday -- could finally show Wal-Mart outpacing its chief competitor.

Target has already lowered its forecast for December same-store sales, or sales at stores open at least a year. The retailer said on Christmas Eve that it expects same-store sales to range from down 1% to up 1%, well below its initial projection for a 3% to 5% rise.

Meanwhile, Wal-Mart has maintained its guidance for a 1% to 3% rise in same-stores sales. And if the results come in at the high end, it will be the first time Wal-Mart has edged out Target in December same-store sales since 2003.

December, a crucial month for all retailers, is largely expected to be a dud for 2007. Many chains were forced to offer deep price cuts on their merchandise at the cost of their margins, while ultimately not bringing in enough holiday traffic to show for it.

Analysts estimate overall same-store sales in December will climb by a meager 0.9%, according to Thomson Financial. Department stores face the bleakest predictions. Their same-store sales are expected to collectively fall 6.8%, largely due to a calendar shift that left them with one less week of sales compared with last year.

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