Wal-Mart

Links 2/23/2010

- Wall Street bonuses jumped 17% last year. “For most Americans, these huge bonuses are a bitter pull and hard to comprehend,” NY State comptroller Tom DiNapoli says. “Taxpayers bailed them out, and now they’re back making money while many New York families are still struggling to make ends meet.”

- Costs of recessions run deep. “Recessions cause skills to depreciate, there are psychological costs, there are costs to family members, the loss of a job generally means loss of health care, the costs to working class households go on and on,” Mark Thoma writes.

- “The alliance that has held back reform begins to crack,” former IMF chief economist Simon Johnson says. “The middle of the consensus has started to move, against mega-banks and against dangerous over borrowing by the financial sector. This will be a long hard slog, but we are finally heading in the right direction.”

- “Expensive and ineffective attempts to fight foreclosures at all costs” has been one of the Obama administration’s most disappointing policy initiatives, Barry Ritholtz notes.

- “The slowdown in the foreclosure rate (now about 1/3 of sales down from a high of 1/2), the home buying tax credit, and the artificial suppression of mortgage rates have all helped to cushion the decline in prices,” says Peter Boockvar. “But when much of this wears off this summer, the market will be put to another test.”

- Problem bank list continues to expand. Hits 702 banks with $403 billion in assets – the largest amount since 1992. “Not all problem banks will fail – and not all failures will be from the problem bank list – but this shows the problem is significant and still growing,” Calculated Risk writes.

- Wal-Mart (WMT) should’ve made the bigger bet on Netflix (NFLX), Dan Frommer argues at Silicon Alley Insider after WMT paid a reported $100 million for video streaming service Vudu.

- Twitter reaches a fresh milestone, saying it’s publishing 50 million tweets a day, or about 600 messages a second.

- Pent-up iPad demand seems to be exceeding demand estimates when original iPhone was released, which is surprising, John Paczkowski says. “The iPad is, after all, an entirely new device category between the laptop computer and the smartphone. And, unlike the iPhone, its market is unproven.”

- Atlanta Fed’s macroblog takes a deeper look behind the core CPI data reported last week.

- Yves Smith’s take on Vogue profiling Tim Geithner: “I suppose puff pieces to hide the true character of what passes for our leaders are a more civilized way to distract the public from the rot in the empire than killing gladiators, but it sure doesn’t feel that way.”

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In A Word, Sales

Posted by Paul Vigna on February 23, 2010
Earnings, Economy, Markets, Retail Sales / Comments Off
Our margins on the xx are looking much better.

Our cat-fish margins are so much better this year than last year.

Today’s slate of earnings reports is dominated by retailers: Home Depot, Sears, Macy’s and some others. For the most part, they’re all doing their shareholders proud, with solid profit growth as margins have bounced back after last year’s margin-killing discounts.

But as a measure of the broader economy, the reports fall short. And that’s because of one thing: sales.

Remember, these are fourth-quarter reports, compared to last year’s fourth quarter, the worst single quarter for earnings ever, at least as measured by the S&P 500 components. That retailers are still struggling to build sales off that nadir says a lot. Let’s go to the videotape:

Home Depot posted a profit of $342 million, up from a loss of $54 million a year ago. But total sales were down 0.3%, and US same store sales were down 1.1%; same-store sales overseas were better, leading to an overall gain of 1.2%.

Macy’s posted a profit of $466 million, far better than last year’s $4.77 billion loss. But they didn’t swing that through higher sales. Sales were down 1.1% to $7.85 billion, and same-store sales were down 0.8.%.

Sears posted a profit of$430 million, up from $190 million last year. Pretty sweet, huh? But sales were down 0.2% at $13.25 billion.

Target was one company that managed to boost both earnings and sales, the former by a hearty 54%, the latter by a much more tepid 3.2%.

And last week, the big kid, Wal-Mart, showed the exact same pattern: better earnings, worse sales. The assumption then was that people were going upscale amid a recovery. Corroborating evidence was supplied by Whole Foods, which saw both total and same-store sales rise. We’d take that with a grain of salt; organic sea-salt, coarsely grounded, of course, that costs twice as much as the stuff on the shelf at the local Foodtown, but salt nonetheless.

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Tomorrow’s Caveats Today

Posted by Paul Vigna on February 18, 2010
Economy, Markets, Retail Sales, Unemployment / Comments Off

We should rename this “Tomorrow’s Caveats Today.” Seems like everything’s got a “but” built into it these days. Today we’re talking about the Philly Fed, jobless claims and Wal-Mart’s earnings, and while the market had some mixed reactions, there are elements beneath the headlines worth keeping in mind.

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Links 1/12/2010

Posted by Steven Russolillo on January 12, 2010
Banks, Economy, Markets, Media, Recession, TARP, Technology, Washington / Comments Off

- As the market embarks on another earnings season, Barry Ritholtz wonders if this is merely the start of a consolidation, or the rally’s end.

- Fed becomes latest bank generating record profits. “This is good news: all that money is being dividended back to the public fisc, keeping the deficit that little bit lower,” Reuters blogger Felix Salmon says.

- CES attendance doesn’t break records, but it exceeds expectations. “A small, but not inconsequential bump, and one that suggesets the industry is indeed beginning to turn the corner,” John Paczkowski writes at Digital Daily.

- Wal-Mart may once again look to get into the Web TV business, as Web video startup Vudu is in “meaningful” acquisition discussions, with WMT the likely buyer, MediaMemo blogger Peter Kafka reports.

- A less fearful market, measured by the VIX, actually represents a cause for concern, Bespoke says.

- Apple’s (AAPL) ‘iSlate’ rumor du joir: TG Daily reports Apple has “snapped up” the entire supply of 10.1-inch, LCD and OLED multi-touch screens for its supposed tablet.

- The carrier cancellation fee is typical, but having to pay two termination fees is a buzzkill for Google’s (GOOG) Nexus One phone.

- Goldman Sachs (GS) acknowledges conflicts with clients and its own trading operation.

- FDIC’s Bair blasts other regulators for reluctance on banker pay plan.

- Conan refuses later “Tonight Show” time slot.

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Amazon Can’t Afford To Lose Wal-Mart’s Price War

Posted by Steven Russolillo on October 16, 2009
Banks, Economic Indicators, Economy, Markets / Comments Off

walmart2Wal-Mart’s (WMT)  continuing price war against Amazon (AMZN) has potential to revolutionize the publishing industry.

Or it may just turn into one huge publicity stunt.

Wal-Mart slashed prices of some highly anticipated new hardcovers to $10, which prompted Amazon to follow suit with the same price cut. Wal-Mart fired back with another cut down to $9, which Amazon matched again this morning.

Wal-Mart, by far the country’s biggest retailer, is aiming to increase its Web presence. The company doesn’t release stats pertaining to online sales, but this latest price war is obviously geared at drumming up publicity about its online offering as well as stealing market share from Amazon.

Wal-Mart CEO Raul Vazquez offered up some fighting words about the retail giant’s strategy. “If there is going to be a ‘Wal-Mart of the Web,’ it is going to be Walmart.com,” Vazquez tells WSJ. “Our goal is to be the biggest and most visited retail Web site.”

Continue reading…

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And It’s Not Even Halloween Yet

Posted by Paul Vigna on October 07, 2009
Economy, Markets, Retail Sales / Comments Off

gijoe

Karen Talley, who covers retail for Dow Jones, sent us the following bit of news for Market Talk (if you’re not aware, this blog is an offshoot of the Market Talk column we write for Dow Jones Newswires.)

MARKET TALK: Target Wants To Be Player For Holiday Toy Season

1:20 (Dow Jones) Target (TGT) joins the Christmas toy wars, cutting toy prices by as much as 50%, including GI Joe’s that will now go for $14.99 and Barbies for $5. The move follows Wal-Mart (WMT) saying last week it will offer more than 100 toys at $10 during the holidays and Toys R Us making a big Christmas push as well. TGT up 0.2% to $48.20. (KJT)

See that? It’s what, Oct. 7, and Target and Wal-Mart are already fighting for holiday sales. Not just setting up their strategies, not planning their pricing platforms, but they’re already slugging it out in the aisles. Forget that Christmas is nearly three months away; these guys don’t have three months to wait for you to buy a GI Joe.

Continue reading…

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Retail’s Mixed March

Posted by Paul Vigna on April 09, 2009
Retail Sales / Comments Off
No more ice cream for me; I'm deleveraging.

No more ice cream for me; I'm deleveraging.

Retails sales in March overall were roughly in line with expectations, but there’s a wide divergence between the winners and losers, which illustrates just what consumers are, and aren’t, buying these days.

Overall, retailers’ same-store sales for March were down 1.8%, according to Thomson Reuters’ tally about an hour ago.  Of the retailers, 54% topped expectations, and 46% missed. But the top sector, drug stores, outperformed by a 0.8% margin, while the worst, teen apparel, missed by a wide 13.6% margin.

Continue reading…

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