April Retail Rebound: Wal-Mart +5%, Target +4.5%
May 7 (Bloomberg) -- Wal-Mart Stores, the world’s largest retailer, reported comparable-store sales for April that rose more than analysts expected. Revenue from U.S. stores open at least a year increased 5%, excluding gasoline sales, in the four weeks through May 1, the Bentonville, Arkansas-based company said today in a statement. That exceeded the 3% average estimate compiled by Retail Metrics Inc., a Swampscott, Massachusetts-based consulting firm.
U.S. store visits rose the most in seven months, spurred by demand in the grocery, health, home and entertainment categories, Wal-Mart said. Some consumers spent more freely on sporting goods and other discretionary merchandise after gasoline prices and payroll taxes dropped. The shift of Easter to April 12 from March 28 in 2008 also lifted sales.
Target Corp. announced Thursday that net retail sales for the four weeks ended May 2 were $4.45 billion, up 4.5% from the comparable period last year.
Minneapolis-based Target (NYSE: TGT) said first-quarter highlights included better-than-expected same-store sales and gross margins, favorable retail expense performance and credit card results that were in line with prior guidance. Target’s April results far exceeded those for the first two month’s of the company’s fiscal first quarter. Same-store sales were down 6.3% in March and 4.1% in February.
2 Comments:
Take a look at Thor Industries (THO). THO is one of the largest US RV Manufacturers. The stock is up over 100% since the market low on March 9th. Last time I checked RV's were a pretty big discretionary item. If such an industry existed during the "Great Depression," how do you think the stocks would have performed. The world is NOT ending as we know it.
Wal-Mart:
- Efficient distribution system
- Relatively low labor costs
- Bulk purchases from China
- Low prices
- A wide variety of consumption goods under one roof, lowering transportation costs of consumers
- Low-quality goods
When income declines, purchases of inferior goods go up. The demand for low-priced goods is less elastic than high-priced goods. Hence, a bad economy is less bad for Wal-Mart than other retailers.
Are increasing Top Ramen sales the next "green shoot" to get excited about?
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