Wal-Mart Stores, Inc. (WMT) is scheduled to report its fiscal third quarter 2009 financial results on Thursday, November 12, 2009. In the previous quarter, the company bested the analysts' consensus estimate by 2.92%.
Analysts' estimates for the quarter ending October 2009 (Q3) range from a low of $0.76 to a high of $0.84, with a consensus of $0.807.
For the fiscal quarter ending October 2009, the consensus EPS forecast has increased over the past week from $0.806 to $0.807 (0.12%) and decreased over the past month from $0.808 to $0.807 (-0.12%). Of the 23 analysts making quarterly forecasts, 1 raised and 2 lowered their forecast.
Downward revision in EPS forecast is attributable to lower than expected sales and higher discounts. Lower sales are attributable to a difficult global economy faced by the consumers. More people are concerned about unemployment. Because of that, the company will continue to be focused on its price leadership message, which is so important in these times. As a result comp sales for the 13 week period from August 1 through October 30, 2009 are expected to be between flat and 2%. Additionally food deflation continues to be a headwind - one that's harder to quantify, but clearly a factor.
Based on the industry reports on back-to-school, the company continues to gain significant market share. Back-to-college comp sales are running in the mid double digits ahead of last year. However, the company's "save money" promise on top brands in school supplies, electronics, home and, in apparel, should lower its margins. Though in the short term, this will impact margins, it is essential for the company to gain customer loyalty when they are faced with an uncertain financial environment.
In the October quarter, total net sales for the company could come in the range of $99 billion to $100 billion. On a constant currency basis, net sales could increase by 1.8%.
On the positive side, the company's comparable store sales are likely to outperform the retail sector almost every place where it does business. For the fiscal year ending January 2010, the consensus EPS forecast has increased over the past week from $3.580 to $3.582 (0.06%) and decreased over the past month from $3.583 to $3.582 (-0.03%). Of the 27 analysts making yearly forecasts, 1 raised and 2 lowered their forecast.
The company's stock closed Thursday at $51.28, compared to the 52 week range of $46.25 and $59.23. The stock seems to be trading at appropriate levels.
