- Wal-Mart (WMT -4.2%) is down sharply after Q3 earnings results disappointed investors, but several analysts think the company is setting itself up strategically for gains down the road.
- Conlumino to Retail Dive: "We take the view that profitability decline is a necessary evil over the short term if it allows Wal-Mart to retain its retail prominence."
- Moody's: "The focus on improving working capital is generating increasing levels of cash flow, with almost $20 million for the first nine months, and despite Wal-Mart’s myriad price reductions on top of a heavily-promotional quarter in many product categories, gross margin actually expanded by almost 50 basis points."
- Buckingham Research: "We view the same-store sales growth as evidence that Wal-Mart’s investment in labor, e-commerce and marketing its value message are working. However, some investors may be disappointed that traffic and comps decelerated slightly” from last quarter." Guggenheim Securities to CNBC: "Traffic was positive this quarter again, up 70 basis points, and in retail that's just one of the biggest and strongest metrics that you need to have positive."
- Wal-Mart trades at its lowest level since the middle part of October.
- Previously: Wal-Mart beats by $0.02, misses on revenue (Nov. 17)
- Previously: Wal-Mart lifts bottom end of profit guidance (Nov. 17)
Original article