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Wal-Mart's world of worry

Thursday, August 16, 2012 - 01:58

Aug. 16 - Wal-Mart stock fell on news that full-year profits could fall short as international growth slows. But its U.S. discount stores continue to rebound- further evidence there are still signs of life in retail. Bobbi Rebell reports.

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The checkout counters are still buzzing at Wal-Mart..and it's earnings were a penny better than forecasts. But the world's largest retailer's profits may miss analysts' forecasts. Growth is slowing in its international markets. Not to worry says S&P Capital IQ's Ian Gordon: SOUNDBITE: IAN GORDON, SENIOR RETAIL ANALYST, S&P CAPITAL IQ (ENGLISH) SAYING: "Foreign currency exchange is a headwind so that's just been reducing their sales and their- actually their profit performance has been pretty good. They slowed down. They are slowing down their square footage growth in some of their markets related in part due to the bribery investigation and also just as they try and get their ducks in a row on the operational front but net net we think international is doing ok. " Gordon still has a buy on the stock- which fell on the earnings news. But it's been a winner recently- up about 18 percent in the last 6 months. There have been signs of life in retail. Earlier this week the Commerce Department said retail sales were up 0.8 percent last month- better than forecasts. And K-Mart owner Sears, whose struggles have been well documented, is getting new attention from investors. Its stock jumped Thursday- despite a weak sales report- because its been getting its costs in line and is losing less money. But Wal-Mart says its customers are still strapped- and in fact they spend more at the beginning of the month- when they get their paychecks. SOUNDBITE: IAN GORDON, SENIOR RETAIL ANALYST, S&P CAPITAL IQ (ENGLISH) SAYING: "I think broadly speaking the consumer is stretched but they have been that way for a bit and you can even make the argument that there is quite a bit of pent up demand particularly as we go into the back-to-school season." Still weighing on the company: the Mexican bribery investigation. The company declined to comment. Bobbi Rebell, Reuters.

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Wal-Mart's world of worry

Thursday, August 16, 2012 - 01:58