Wal-Mart Wins, But Drops Monthly Reporting Entirely (WMT)

Wal-Mart Stores Inc. (NYSE: WMT) is up big this morning on a whopper of a same-store-sales figure for the month of April.  The world’s largest retailer also noted that its 13-week comparable store sales ex-fuel are exceeding the company’s forecasts.  Be advised that Wal-Mart also revised its comparable store sales reporting policy.

For the four weeks ended May 1, 2009, it posted Wal-Mart U.S. sales of $19.326 billion, up 7.7% from $17.944 billion a year earlier.   There were drops in the Sam’s Club and in international sales.  Sam’s Club sales fell by -4.3% to $3.462 billion.  International revenue fell by -7.0% to $7.065 billion.  But there is a huge disparity on the surface because of currencies, and the fuel price at the pump were a factor as well.

On a constant currency basis, international sales rose by 13% in the April period. With a 20% impact from currency exchange rates, the reported sales fell by 7% percent in the International segment.

Without fuel, the four-weeks comparable sales were up 5.9% at Walmart U.S. and were up 0.3% at Sam’s Club.

Taking much lower fuel prices at the pump and taking currency into account internationally, these numbers were far better than analysts were looking for.  We had estimates from Thomson Reuters as being 2.9%, but 3.0% to 3.5% was what we had in mind considering the recent strength.The company expects to report earnings on May 14, 2009 and its total net sales for the fiscal quarter ended April 30, 2009 are now listed as approximately $93 billion, which includes an impact from currency exchange rates.  We have estimates as being $96.8 billion from Thomson Reuters, but the company is noting that there is this currency impact that seems higher than what other companies have been using.

But there is a huge policy change here.  The company already had stopped offering monthly guidance.  Now the company is going much further.  The company noted, “We will no longer report monthly sales. We will provide comparable store sales results on a 13-week basis, along with guidance for the upcoming 13-week period. And, we will release this information during our scheduled quarterly earnings calls.”

The company says this policy change is to “better align investors with the long-term view we take to build shareholder value.”  We do not feel this is a good trend even if it is acceptable for a company to stop offering guidance.  This is almost the same as an economic event now that the company is so large.  If all the retailers halt their monthly reporting of sales figures, then the impact and the estimates for those quarterly numbers and monthly numbers calculated by the Commerce Department are going to become extra volatile.

Either way, Wal-Mart stock is trading up on the news.  At 8:41 AM EST we have shares up 4% at $51.50 on over 650,000 shares pre-market.

JON C. OGG