This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Wal-Mart's Sales: Unfixable?

NEW YORK (TheStreet) -- Wal-Mart (WMT) reported its fifth straight quarter of U.S. sales declines, leaving investors asking how the discount behemoth plans to regain shoppers.

While the No. 1 retailer forecasts third-quarter same-store sales between a decline of 2% to a increase of 1%, exactly how it plans on returning to positive sales territory remains unclear.

Walmart

There's no denying that the aggressive rollbacks put in place during the quarter didn't generate the traffic Wal-Mart expected. Thus, the company will return to its strategy of "everyday low prices."

During the second quarter, Wal-Mart's total revenue rose 2.8% to $103.73 billion, but this fell below analysts' expectations of $105.33 billion. Wal-Mart's U.S. same-store sales dropped 1.8%, at the low range of forecasts.

Chief Financial Officer Tom Schoewe said on call with reporters that the Wal-Mart customer is under such severe pressure that even dramatic discounts are not enough to entice spending.

So what is? "At the end of the day it is a function of price and assortment," Schoewe said. "When we get the two right, that's when we are successful."

Wal-Mart, of course, hasn't gotten the two right for some time, though it appears to be taking proactive steps to mitigate the issue. Wal-Mart is currently in the process of restocking some merchandise that it misguidedly cut under its "Project Impact" initiative. "We took too much out and we are adjusting that," Schoewe said.

Still, problems loom for Wal-Mart's discretionary segments, especially apparel. "Apparel is not where we want it to be, but it is an opportunity for us," Schoewe said. Wal-Mart is now planning on "returning to its roots" with apparel basics like socks, underwear and t-shirts.

Improving its assortment, however, may prove difficult, as Wal-Mart is currently in the process of finding a replacement for Chief Merchandising Officer John Fleming, who stepped down earlier this month after Bill Simon was named the new CEO. Schoewe said that it is the company's intention to fill the position and they are looking at candidates internally and externally.


When will Wal-Mart's sales recover?

Second quarter of 2010
Third quarter of 2010
Fourth quarter of 2010
First half of 2011
Second half of 2011

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • 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 Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,122.01 +15.31 0.09%
S&P 500 2,000.12 +0.10 0.00%
NASDAQ 4,569.6210 -1.0160 -0.02%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs