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Wal-Mart lowers same-store sales estimate for September

Wal-Mart lowers same-store sales estimate for September

Blaming a computer error, Wal-Mart Stores Inc. on Wednesday lowered its September sales estimate again. The news sent shares lower in early trading and prompted analysts to speculate about what happened at the world's largest retailer when other merchants are expected to report higher sales amid cooling temperatures and easing gasoline prices.
Wal-Mart reduced its sales estimate to 1.3 percent from 1.8 percent on Saturday. The discounter originally forecast sales at stores open at least a year in a range of 1 percent to 3 percent.
Wal-Mart said Wednesday it revised the figure because it "incorrectly coded" 235 Wal-Mart stores and Sam's Club warehouse stores in calculating comparable sales for the five weeks comprising the September period. It said that total sales will not be affected.
Wal-Mart blamed the shortfall in September on difficult comparisons with the year-ago period, when same-store sales surged 3.8 percent on a buying spree related to Hurricane Katrina.
The disappointment comes as Wal-Mart is upgrading its merchandise and trying to improve its image amid a declining stock price and increasing criticism about how it treats its workers.
Wal-Mart's lackluster performance is expected to be one of a few exceptions when the nation's retailers report their final September results Thursday. Thomson Financial expects a 5.1 percent same-store sales gain, excluding Wal-Mart's figures.
Kohl's Corp. on Tuesday reported a robust 16.3 percent rise in same-store sales for last month. Wal-Mart's chief rival, Target Corp., has raised its same-store sales outlook to a 5 percent gain for September.
In fact, one might have expected Wal-Mart_ which has often blamed rising gasoline prices for slowing sales since this past spring _ to have enjoyed strong sales in September, when fuel prices declined. Wal-Mart has averaged a 2.5 percent gain in same-store sales from the February to August period.
But Family Dollar Stores Inc., which also caters to low-income shoppers, didn't benefit either from falling gasoline prices. Last week, it blamed difficult comparisons to the year-ago period when it cut its September same-store sales forecast to 2 percent from a projected range of 3 percent to 5 percent.
Lazard Capital Markets analyst Todd Slater believes that receding gasoline prices isn't a big factor in the short term. "It is a help, but I think the perception is greater than the reality," he said.
Slater says he is not sure whether Wal-Mart's weak performance goes beyond hurricanes, but he believes that the retailer, which sells gasoline at Sam's Clubs, could have actually been hurt by receding prices at the pump.
In a research note, issued Monday, Charles Grom, a retail analyst at JP Morgan, speculated that Wal-Mart's remodeling efforts are serving as "a drag as it moves closer to updating approximately 1,300 stores by Nov. 1."
In any case, September's biggest winners will be apparel chains and department stores, which should benefit from cooler weather and a pent-up demand for fashion, Slater said.
The department store sector is expected to post a 5.3 percent same-store sales gain for September, much better than last year's lackluster 1.6 percent increase, according to Thomson Financial.
Shares at Wal-Mart, which earlier fell more than 1 percent, rose 3 cents to close at $49.49 on the New York Stock Exchange.


Updated : 2021-07-30 21:09 GMT+08:00