10 December 2008

WMT: Financial Analysis through October 2008 (Update)

We previously posted an analysis of Wal-Mart's earnings announcement for the quarter that ended on 31 October 2008, which was the third quarter of the company's fiscal 2009. 

Since Wal-Mart has now filed a 10-Q with the SEC, we were able to update the analysis to incorporate the data that hadn't previously been disclosed.

Discounter Wal-Mart Stores, Inc. (NYSE: WMT) had sales of $400 billion, nearly 10 percent of U.S. retail sales, in the last 12 months.  It garnered the top spot on the 2008 edition of the Fortune 500 list of America's largest corporations, edging ahead of Exxon Mobil (NYSE: XOM).  In today's slow U.S. economy, consumers are worried about their jobs, homes, and by high food and energy prices.  Super-efficient Wal-Mart has the advantage of selling the merchandise shoppers can't do without, and it does so at prices difficult for competitors, such as Target (NYSE: TGT), Kohl's (NYSE: KSS), and Sears Holdings (NASDAQ: SHLD), to match.

Wal-Mart's low prices are especially attractive to shoppers during tough times, but the company's sales could weaken if the recession deepens.

Mike Duke, vice chairman of Wal-Mart International, will take over as CEO from Lee Scott on 1 February 2009.

The additional data in the 10-Q did not alter the gauge scores from those we computed using the preliminary report.
  • Overall: 27 of 100 (down from 32)

Our evaluation of the October quarter's Income Statement wasn't affected by the 10-Q.  The evaluation will not be repeated here, but it is available in the earlier posting.


  1. Yeah, but a lot of people fail to consider the hidden prices when they're assessing the price of products at Walmart: the lost jobs to outsourcing. The tax on our government because of healthcare costs. The list goes on and on. This Anti-Walmart ad is pretty eye opening in explaining why their claim for "low prices" isn't exactly true.

  2. Well said StrangeR. Walmart does have cheap prices and is making a lot of money but there has to be a cost to someone.