Let's dig into some of the recent retail earnings reports and extract evidence of the end of the trade-down effect.
Inferior/Low End: Wal-Mart (WMT) reported reported fourth-quarter 2010 EPS of $1.17 vs. analyst estimates of $1.12. The company benefited from strong international sales but missed out on revenue expectations due to disappointing sales in the U.S., where same-store comps fell 1.6%.
At the same time, Wal-Mart warned that it was expecting soft sales for the first-quarter and fiscal-year 2011, evident in its guidance for fiscal-year EPS of $3.90 to $4 vs. analysts' expectations of $3.97. This would imply earnings growth of 7% to 9% in the coming year.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV