Thursday, December 28, 2006

Paperstand

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.

No comments: