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Wal-Mart Is Still Looking Good

NEW YORK ( TheStreet) -- Shares of Wal-Mart (WMT - Get Report) are up about 10% so far this year.

That's not a shabby increase, and it makes me think that Wal-Mart investors aren't buying in to concerns that the recent increase in the Social Security payroll tax will dent the retailer's sales.

The company's solid fourth-quarter earnings report also shows that Wal-Mart should do just fine.

Granted, improved consumer spending is always important for Wal-Mart. But the immense size of this company serves as protection, and shares are not going to sway that drastically from one quarter to the next. For that matter, the stock looks fairly priced at the moment. But that's not to say more gains are not on the way.

Solid Fourth-Quarter Results

As is often the case, there were very few surprises in Wal-Mart's earnings results. The company doesn't deviate much from what was expected. Fourth-quarter revenue increased 3.9% to $127.1 billion.

This was slightly less than consensus estimates and marked much slower growth than Target's (TGT - Get Report) 7% increase in revenue.

Earnings arrived better than expected at $1.67 per share, up 11% year over year -- helped by a much favorable tax rate. Likewise, comps grew 1%. This is the metric that tracks the sales performance of stores opened at least one year. It's not a robust number, but it bested Target's 0.4% comps, which were down from a year earlier.

Wal-Mart's foot traffic declined 0.1%, but that was still better than Target's 1% decline. And Wal-Mart was able to offset this with a 1.1% increase in average transactions.

Perhaps most interesting, the company said that the 1% comp growth in the U.S. helped the company gain market share in several categories, including food, health & wellness/OTC, entertainment and toys.

We can speculate from whom Wal-Mart stole share in the quarter. Toys R Us comes to mind, as does Best Buy (BBY), which has had its own struggles of late.

Although Best Buy recently beat earnings and revenue estimates, there was very little to suggest that Best Buy is winning in the entertainment category after squeaking out just 0.2% revenue growth in its fourth quarter.

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