This Day On The Street
Continue to site
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

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.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
TGT $79.08 -2.80%
WMT $66.64 -3.30%
AAPL $93.17 -1.80%
FB $116.53 -0.17%
GOOG $689.97 -0.15%


Chart of I:DJI
DOW 17,691.26 -139.50 -0.78%
S&P 500 2,055.14 -20.67 -1.00%
NASDAQ 4,752.6650 -52.6260 -1.10%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs