A company fudges, spinning facts to suit its aims -- and the business media don't notice. So I guess it shouldn't be a holy wonder that when a company actually goes out of its way to be truthful, upfront and altogether transparent, the business media still don't notice.
monthly same-store sales report, which gets a rarely granted "Nod of Approval" from The Business Press Maven. Two items stand out, making me salute.
Longtime readers know that there is no more-problematic aspect to monthly same-store-sales reporting than how retailers constantly blame disappointing sales on all manner of weather (it was too hot, too cold, too hot-then-cold) -- and the business media stand back and let them do it. Bad stenographers, bad!
In reporting unexpectedly strong same-store sales results for the month of June, Wal-Mart also highlighted the weather. But guess how?
Here it is, only a few sentences into
: "Favorable weather and improved assortments helped drive seasonal sales in apparel, toys and hardlines."
Weather helped?! Be still my beating heart.
So Wal-Mart said that the weather during the month actually improved results. In other words, it let investors know that a portion of its performance wasn't a function of its brilliant marketing and chalked it up, essentially, to good luck.
Here's the truly remarkable thing, though. The Business Press Maven has perused countless business-media articles on Wal-Mart's June results, and guess what? Not very many mention that the weather was a benefit.
, but it failed to take the next obvious step of pointing out that this was a rare honest moment in the sordid relationship between retailers and weather.
Why is it important? Because any time a company makes a gesture of transparency, it speaks well. And if something comes up down the line that requires trust in a statement made by management, the savvy investor should factor in honest efforts in the past. Trust should be given on a case-by-case basis, and this -- unlike blaming a summer breeze for a sales blip, which can sound like excuse-making -- helps the cause.
A note of slight caution: With weather so variable by region, I'm still not certain how a
retailer can point to weather as an overall determining factor. I do think Wal-Mart is in part trying to temper expectations, to sandbag a little bit for itself. That's not a bad thing -- just be aware.
Be aware, too, of how Wal-Mart displayed the benefit it received from increased gas sales in a front-and-center fashion, in a rarely seen doubling-down on transparency.
, in contrast, took a less-upfront approach. It hid nothing; it did nothing wrong. But it didn't display the benefit it received as centrally, and guess what?
No surprise here: The business media generally reported Wal-Mart's results accurately (which meant more modestly) and were a bit more vague on Costco.
Take another look at the
. Right at the top, you see tables breaking down sales, which were far better with fuel factored in than without. The business media generally used the less-volatile, more-representative and lower number for June's same-store sales: 5.8%. It was still a couple of points higher than expectations, but it was lower than the 6.4% with fuel.
Contrast this with
. Again, Costco did not do anything wrong. It just didn't go through as much effort to do something right -- and the difference was lost on the business media.
The first we hear from Costco about its same-store sales is that they were up 9%. The only table in the release -- also up way high -- shows it up 9%. Down further, we are told that without gasoline price inflation, same-store sales would have been up 5%.
But without a really visible breakdown, much of the business media used that 9% number, which is less informative to investors, and never mentioned a lower number. Even our own
Look. We see enough companies making bald efforts to spin and alter facts to suit their ends. When we see a company making efforts to inform, be upfront and not let investor expectations outpace reality, let's take notice.
Wal-Mart, well done.
At the time of publication, Fuchs had no positions in any of the stocks mentioned in this column.
Marek Fuchs was a stockbroker for Shearson Lehman Brothers and a money manager before becoming a journalist who wrote The New York Times' "County Lines" column for six years. He also did back-up beat coverage of The New York Knicks for the paper's Sports section for two seasons and covered other professional and collegiate sports. He has contributed frequently to many of the Times' other sections, including National, Metro, Escapes, Style, Real Estate, Arts & Leisure, Travel, Money & Business, Circuits and the Op-Ed Page. For his "Business Press Maven? column on how business and finance are covered by the media, Fuchs was named best business journalist critic in the nation by the Talking Biz website at The University of North Carolina School of Journalism and Mass Communication. Fuchs is a frequent speaker on the business media, in venues ranging from National Public Radio to the annual conference of the Society of American Business Editors and Writers. Fuchs appreciates your feedback;
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