Wal-Mart Stores Inc. said U.S. same- store sales will be unchanged in November, the worst performance in more than 10 years, jeopardizing Chief Executive Officer H. Lee Scott's prediction for a pickup during the holiday season.
Disappointing clothing sales and disarray from store renovations have hurt results, the Bentonville, Arkansas-based company said in a statement today. Scott told analysts last week he expected sales to improve as the company offered holiday merchandise and gasoline prices fell.
Wal-Mart shares declined for the fifth straight day, the longest losing streak in more than two months, dragging down stocks of other retailers. Kohl's Corp. and Target Corp. also reported lower-than-forecast October results, raising concerns that holiday sales will slow.
``The trends have clearly gotten a little bit worse than investors were expecting'' for Wal-Mart, said Rick Rubin, an analyst at Mercantile Bankshares Corp. in Baltimore, with $22 billion in assets including Wal-Mart shares. ``Obviously, this has been more than just short-term.''
October sales at stores open at least a year gained 0.5 percent, matching Wal-Mart's estimate released five days ago. Wal-Mart had earlier forecast a gain of 2 percent to 4 percent.
The November estimate means Wal-Mart, the world's largest retailer, is headed for its worst monthly performance since April 1996. At that time, Wal-Mart said a shift in the timing of Easter hurt results, resulting in a drop of 0.6 percent in same- store sales. In November 2005, U.S. same-store sales increased 4.3 percent.
Trailing Rivals
Wal-Mart's sales trail results at rivals. Target, the second-largest U.S. discount chain, said today October same- store sales gained 3.9 percent. October sales at 54 chains surveyed by the International Council of Shopping Centers rose 3 percent.
Wal-Mart is losing customers to retailers such as Target, said Dan Popowics, an analyst at Fifth Third Asset Management in Cincinnati.
``They're just having trouble driving sales in their stores,'' said Popowics, whose firm manages $21 billion in assets including Wal-Mart shares. ``Clearly they've somewhat underdelivered in recent months. A lot of competitors are doing better than them.''
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