Wal-Mart Stores Inc.
) reached a 52-week high of $81.00 on Nov 27, after the
supermarket chain announced several lucrative offers and
discounts for the holiday season last week. These promotional
efforts are expected to provide a boost to the top line, which
has been sluggish since the past few quarters.
Shares of this giant retailer eventually closed at $80.93,
reflecting a year-to-date return of 16.88%. The company's
long-term estimated earnings per share growth rate is 9.0%.
Average volume of shares traded over the last three months came
in at approximately 6,059K.
As the holiday season from Thanksgiving Day to Christmas has
six fewer days compared to the previous year, retailers are
gearing up their sales offering to make up for the shortened
shopping period. Wal-Mart started a pre-Black Friday savings
event in stores and online from Nov 22, a week ahead of the
In order to remain competitive in this tough retail
environment, Wal-Mart extended its Christmas Ad Match to its
online customers, which was earlier offered only in its stores.
Under this offer, Wal-Mart agrees to give a gift card to its
store and online customers if they find a cheaper price at a
competitor's store. The offer is valid for items purchased
between Nov 1 and Dec 24, excluding Thanksgiving Day (Nov 28) and
Black Friday (Nov 29).
Wal-mart also opened its stores three hours earlier than
previous year at 6:00 pm on Thanksgiving Day. The supermarket
chain offered wristbands or tickets to shoppers to reserve
popular items like Beats headphones and H-Plaptops.
It also announced that it will guarantee 21 of its doorbuster
items, which is seven times greater than the items guaranteed
last year. By guaranteeing a doorbuster item, Wal-Mart ensures
its shoppers that if they cannot buy these goods during the Black
Friday store hours, they'll receive it by Christmas at the
Sam's Club, a leading membership warehouse club and a division
of Wal-Mart, announced the extension of holiday savings a week
beyond Cyber Monday with exclusive values and free shipping to
its online customers from Nov 30 through Dec 8.
As the National Retail Federation cautioned that consumers
tighten their spending budget this year due to the ongoing
macroeconomic headwinds, retailers are working hard to get people
to spend by bigger-than-life advertising. Although this
aggressive advertsing/promotion may pressurize margins they could
lead to high sales during the holiday season.
Earlier this month, Wal-Mart announced third-quarter fiscal
2014 results. The consumer giant beat the Zacks Consensus
Estimate for earnings but missed the same for revenues due to a
gloomy consumer spending environment globally. Walmart also
narrowed its earnings expectations for the fiscal year 2014. The
latest move by Walmart to kick off its holiday shopping season is
expected to prove beneficial for the company.
Other Stocks to Consider
Wal-mart carries a Zacks Rank #3 (Hold). Some better-ranked
stocks in the retail sector include
Harris Teeter Inc.
Marks & Spencer Inc.
). All these stocks carry a Zacks Rank #2 (Buy).
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