NEW YORK (Real Money) -- In the National Football League they call it "Next Man Up." That's when you expect a player to go down from injury or wear and tear and you insert another player in the lineup and then he gets the mix going.
The Dow Jones Industrial Average is full of next-man-up situations and today's one of those days where you see it writ large.
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First man up? Walmart (WMT) . Here's a company that many had written off as a creature of bad habits, a dowdy store chain with a Montgomery-Ward feel to it, out of step with time and place. Now that may have been the case but this Doug McMillon-led Wal-Mart sure doesn't feel that way. We got a nice upside surprise for the first time in ages from a company that had begun to stand for lower prices, not in the stores but in the stock market. I liked everything that McMillon had to say and it's clear he has his pulse on the stores the way the legendary founder Sam Walton had.
Now I hear all of the catcalls here, that the company had repeatedly cut forecasts, so when it finally beats one, well, big deal. I think that's short-sighted and if you listen to the pre-recorded conference call, you will know that there is, to use McMillon's term, a "newness" to the old joint. What's different? First, there's a template that's really working -- the smaller neighborhood stores -- that gave you 5.5% comparable-store sales. Boy oh boy, we haven't seen anything like that for ages. I like this concept because those of us who shop at Wal-Mart have become a little intimidated by the raw size of the place. The neighborhood stores are downright quaint and I like the fact that Wal-Mart's got a chit located near the hottest game in town: the dollar store. Neighborhood Market isn't a dollar store per se, but it does have bargains and it's got a huge amount of expansion ahead of it.
What else? How about the fact that, unlike other retailers, it had a strong October as the month went on culminating in an excellent Halloween season. That's something I am used to hearing from Target (TGT) , not from Wal-Mart, as the holiday merchandise never seemed on point. The company also had a strong back-to-school season that didn't let up and it did well in apparel and home and traditional back-to-school supplies. Again, something unexpected. Wal-Mart had often been out of stock of so-called urgent items. That no longer seems to be the case. And, after stutter steps, it sounds like Wal-Mart truly has embraced natural and organic, a real coup for Hain Celestial (HAIN) , by the way. Quite a far cry from the day I went into a Wal-Mart with my daughter in Northampton, Mass. in 2009 and asked the greeter where in the natural and organic aisle were rice cakes and I was directed to the candy aisle to buy Rice Krispie bars.
I like what I hear, especially when you consider that a Wal-Mart shopper is precisely the kind of person who benefits the most from the continued freefall in oil, which quickly translates to lower gasoline prices and a return to better employment growth, again a win for this largest of all retailers.
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