Walmart Earnings Disaster Exposes a Collapsing Economy

[Roverron]

http://finance.yahoo.com/blogs/break...142435260.html


Walmart (WMT) reported earnings of $1.24 a share this morning on revenues of $116.2 billion. Analysts had been expecting $1.25 on $118.5 billion.
•Sales in stores open more than a year declined 0.3%.
•Walmart also guided lower for the full year citing a "challenging sales and operating environment."
•The stock is off sharply and at risk of going negative for the last 52 weeks.

Those are the numbers, but not the whole story. Walmart is the thermometer of the American economy. Disregard the government data. Jobs and GDP and all the rest are at best inaccurate measures of the economy and at worst flat out corrupt. Walmart is capitalism writ large. The entire organization is focused on nothing but selling goods and services to Americans. It may be an empire in decline, but Walmart sells more than $1 billion worth of merchandise in a bad quarter.

When Walmart misses estimates, it can only mean one of two things: either Walmart or the American economy is weaker than anyone thought.....................................

..............."Walmart is a terrific operator... They didn't suddenly become stupid," says says Howard Davidowitz, one of the top retail minds in the country. "The economy is in collapse. That's what's going on."


•150 million customers which collectively spent less in Walmart stores than in the same period last year.

•50 million customers shop at Target (TGT), which he also expects to have negative comp stores sales when it reports next week.

•Macy's (M) also missed expectations Wednesday.

Three makes a trend. The GDP data is positive and the employment data says things are improving gradually. Either-
the best merchants in America forgot how to sell
Americans stopped consuming beyond their means
or the economy is turning south, not getting better.

"I don't think we're in a recession right now, but I think there's a 50 percent chance we'll be in one next year," Davidowitz says, and there's nothing the government is going to be able to do about it. "We've spent all the money, we've borrowed all the money, and we're in the tank."