First up, the AP via Bloomberg:
Wal-Mart 2Q profit rises 5.7 pct, raises outlook
Wal-Mart Stores Inc.'s second-quarter net income rose 5.7 percent as the world's largest retailer is wooing back frugal shoppers across the globe by doubling down on low prices.From Reuters:
The discounter also said Thursday that it's raising its full-year profit outlook. But quarterly revenue that came in short of expectations disappointed investors, who sent the company's stock down 3 percent to $71.99 in premarket trading.
Wal-Mart's results are considered an economic bellwether because the company draws nearly 10 percent of nonautomotive retail spending in the U.S. In its latest report, the discounter, based in Bentonville, Ark., said that its low-income shoppers are still having trouble stretching their dollars to the next payday. But Wal-Mart's focus on rock-bottom prices is paying off....MORE
Wal-Mart sees slowing international growth, stock falls
And from Wired:
Wal-Mart Stores Inc (WMT.N) forecast full-year earnings that could fall short of Wall Street expectations as growth in international markets slows, even as its U.S. discount stores saw improved sales in a tepid U.S. economy.
The world's largest retailer, viewed as a barometer of economic activity, continues to see signs customers are strapped - spending more at the beginning of the month, when they get their paychecks.
"The paycheck cycle remains pronounced, and there continues to be a lot of uncertainty in the global economy," Chief Financial Officer Charles Holley said in a recorded message on Thursday.
Wal-Mart shares fell 3.3 percent to $72 in premarket trading.
Sales at Walmart U.S. stores open at least a year, or same-store sales, rose 2.2 percent in the second quarter. The discount retailer has notched four consecutive quarters of same-store sales growth at Walmart U.S., by far its largest unit....MORE
Walmart’s Master Plan to Sell China to Itself
Walmart’s mastery of brick-and-mortar retail depends largely on a peerless supply chain that enables its stores to sell Chinese-made goods to U.S. consumers on the cheap. But the company has struggled to score big in the Chinese market itself.
That could change soon, as Chinese consumers beset by a slowing economy start hunting for discounts. And no one does discounts better than Walmart. Chinese regulators this week approved Walmart’s plan to take a majority control of a major Chinese e-commerce site, giving the world’s biggest retailer a digital doorway into the homes of the world’s biggest country.
Walmart owns 370 stores in China under several different brands, including its signature Supercenters, as well as Sam’s Clubs and its smaller Neighborhood Market stores. The company rarely breaks out its sales figures country-by-country outside the U.S. but has said it brought in $7.5 billion from its then 329 stores in China, or a little less than $23 million per store. Walmart opened its first Chinese store, a Sam’s Club in Shenzhen, in 1996. By comparison, combined sales in Walmart’s more than 3,800 U.S. stores last year topped $264 billion, or nearly $70 million per store.
Walmart faces challenges in the Chinese market that simply don’t apply in the U.S., where the Bentonville, Arkansas-based chain enjoys almost-mythological status as the invincible low-price slayer of all competition, including mom-and-pop small businesses. In China, European and domestic retailers vie competitively with Walmart for the coveted Chinese consumer’s yuan. Walmart’s image took a hit when authorities in the city of Chongqing shut down several Walmart stores and detained dozens of employees over allegations the stores mislabeled conventional pork as organic. Foreign companies must also navigate a government bureaucracy that exists in part to keep non-Chinese businesses from gaining too much control over domestic markets....MORE
