Thursday, December 28, 2006


The WSJ’s „Heard on the Street” column discusses Wal-Mart (WMT), which cites a clutch of short-term problems behind its slowing pace of sales late this year, but bearish observers say looming challenges could hinder the retailer through ‘07 and beyond. Wal-Mart execs fingered disruptions from store remodeling, an overly aggressive bet on a new line of women's apparel and a slip from sales temporarily boosted by ‘05 hurricane-recovery efforts to explain lackluster results at its established stores. Several analysts don't foresee Wal-Mart's SSS rebounding until well into ‘07, or even later. Richard Hastings, of Bernard Sands, predicts that SSS for Wal-Mart's main US division "will now trend flat to slightly negative for the foreseeable future." Even some Wal-Mart bulls are cautious. Bear Stearns analyst Christine Augustine, who rates Wal-Mart's shares Outperform, with price tgt of $54-55, says it will be several months before Wal-Mart's sales benefit significantly from its efforts to remodel stores and tailor merchandise to customers. "It's our belief that SSS may remain under pressure for the 1H07," Ms. Augustine says.

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