Wal-Mart: "Families Are Adjusting To A Reduced Paycheck And Increased Gas Prices"

Tyler Durden's picture


Moment ago Wal-Mart reported a top-line miss, a bottom line beat, a dividend hike and a rather subdued full year forecast ($5.20-$5.40 on Exp. of $5.39), and nobody cared. The only thing that algos and carbon-based lifeforms alike honed in on, was the recap of the most recent 13 week period, to see if WMT was only kidding when it said that February sales, which obviously were not part of Q4 results, were a "total disaster." The reason WMT's stock is not doing to well in the pre-market is that they did not like what they found.

Here is the key section:

"We are confident that our low prices will continue to resonate, as families adjust to a reduced paycheck and increased gas prices," Simon said. "We see the underlying health of the Walmart U.S. business is sound, and sales trends are similar to what we've demonstrated in the last few quarters. However, February sales started slower than planned, due in large part, to the delay in income tax refunds. We began seeing increased tax refund check activity late last week in our stores, resulting in a more normalized weekly sales pattern for this time of the year. Due to the slower sales rate in the first few weeks of this year's first quarter, we are forecasting comp sales for the 13-week period from Jan. 26 to Apr. 26, 2013 to be around flat. We continue to monitor economic conditions that can impact our sales, such as rising fuel prices, changes in inflation and the payroll tax increase."

One can hope that all the other retailers in the US, which are just as dependant on the consumer's discretionary revenue stream which is now certifiably less, will adjust just as well.

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Thu, 02/21/2013 - 08:30 | 3262627 doomandbloom
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Thu, 02/21/2013 - 08:42 | 3262628 GetZeeGold
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Paging Charlie Sheen.....cleanup on aisle 5.

Thu, 02/21/2013 - 09:07 | 3262707 Lost My Shorts
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Thu, 02/21/2013 - 09:20 | 3262742 Supernova Born
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Walmart shoppers might not have advanced degrees, but like animals before an earthquake, they can sense a deep and ominous rumbling beneath their feet.

Thu, 02/21/2013 - 09:43 | 3262782 TruthInSunshine
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If consumers are feeling less Hope, and scrounging their couch cushions for more Change NOW, as Heath Ledger playing the Joker in The Dark Knight Rises said:

"Just wait until they get a load of [Nominal GDP Targeting Discussed at the G-20]."

Central Banks Discussed Nominal GDP Targets* at G-20 (Businessweek)

*Nominal GDP Price Targeting is central bankster code talk for unleash the tsunami of inflation, which as most of you know, is born of absolute desperation as things "fall apart."

Here's a central bank joke that's relevant for today:

Q:   What does a central fractional reserve bank do when confronted with an absolute, objectively provable failure of massive program having massive adverse consequences?

A:   More of the same.

Thu, 02/21/2013 - 09:48 | 3262837 SafelyGraze
SafelyGraze's picture

high unemployment? check.

government incentives to locate bizness? check.

militarist clock punching? check.

lower-er wages paid in devaluing currency? check.

coverage by "socialist website"? check and check.



Thu, 02/21/2013 - 10:09 | 3262959 BLOTTO
BLOTTO's picture

The average US Wal-Mart customer's income is below the national average, and analysts recently estimated that more than one-fifth of them lack a bank account, twice the national rate.




(Please take the wiki reference with grain of salt for reliable info...of course...)

Thu, 02/21/2013 - 10:51 | 3263120 MachoMan
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In other words, the first people eaten by the grinder otherwise known as cost-push inflation.

Thu, 02/21/2013 - 11:49 | 3263393 McMolotov
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That deep and ominous rumbling is usually the 400-lb woman on the scooter behind you.

Thu, 02/21/2013 - 14:08 | 3264019 Evolution Gene
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Hope they keep the bagz of Cheeze-It's on the lower shelf...

Thu, 02/21/2013 - 08:33 | 3262631 JackT
JackT's picture

Won't be long until that $5.39 exp. is forgotten

Thu, 02/21/2013 - 08:34 | 3262629 NoDebt
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You're not getting poorer, it's your memory that is playing tricks on you.  Grab your tax refund check, click your heels 3 times and off to a Kansas WalMart you go.


Thu, 02/21/2013 - 08:48 | 3262668 Bad Attitude
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I would have expected Walmart to be the prime beneficiary of the increasing enrolements in SNAP/Food-Stamps.


Thu, 02/21/2013 - 09:06 | 3262701 Son of Loki
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Florida to expand Medicaid under health overhaul


TALLAHASSEE, Fla. (AP) -- Gov. Rick Scott announced plans Wednesday to expand Medicaid coverage to roughly 900,000 more people under the federal health overhaul, a surprise decision from the vocal critic of President Barack Obama's plan.





Open your wallets...be generous....the "funny" side effect of adding millions of people to Medicaid is fewer and fewer doctors accept this insurance anymore. I can't blame them. Getting paid 10 cents on the dollar ain't no fun for them. Fewer then 6% of the docs in my town accept M/M nowadays.

Thu, 02/21/2013 - 09:38 | 3262801 GeezerGeek
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The Scott plan only extends for three years, during which the Federal contribution to Florida's Medicaid plan will be 100%. Thereafter it is to slide to 90%, and Scott has chosen to decline commiting to taxing Floridians 3 years in the future. Besides, he's up for reelection soon and has to fend off challenges to his compassion. One of the names being floated around as his opposition is Charlie Crist, the ex-Republican ex-governor Obama-hugger who lost to Senator Marco Rubio.


Thu, 02/21/2013 - 08:35 | 3262636 Desert Rat
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Cant wait for the 27th to see if the glow has faded from TGT as well...

Thu, 02/21/2013 - 08:38 | 3262643 dobermangang
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The real disaster will be JCP.  Let's see how their "everyday low prices" campaign fares when their lack of earnings report comes out on the 27th.

Thu, 02/21/2013 - 08:41 | 3262649 Desert Rat
Desert Rat's picture

Oh yeah, no doubt JCP is f'ed... TGT is at least an analogue to WMT... 

Thu, 02/21/2013 - 08:57 | 3262684 disabledvet
disabledvet's picture

if they fail (and i would like to tell you they will not) it's because they've done the right thing. "standing around looking like a jack ass" is a bad way to bankrupt as a retailer...though the most common. I'm not a bear even if i get my 40% down move. "everyday low prices" is part of the value equation...and Penney's is going the extra mile by trying to "bring forward" something "not stale." Wal Mart is not alone...fighting for the PENNIES of these US based consumers is going to be a real challenge this year...hopefully not next of course. the Government has ordered the American people to stop spending...and they are obliging. there are so many ways to...ahem "give" ahem...so much more than already is being done...well, we'll just have to wait and see. with Sequestration just days away "it's about to get a lot harder." (it would be a lot worse without Sequestration in my view.) i have a hard time seeing how energy prices are going to be a problem going forward...but i look forward to being wrong on that one too.

Thu, 02/21/2013 - 09:29 | 3262768 LawsofPhysics
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"i have a hard time seeing how energy prices are going to be a problem going forward.."


Why, are the 7 billion+ people on the planet who are demanding/seeking a higher standard of living going anywhere?  Stop being so "merica-centric", there is plenty of demand for energy on the planet.  So long as there is demand, the "price" will hold (econ 101).  I use quotations around price because in many cases folks are already trading things like chickens for some fuel.  Welcome to global currency collapse, but should we have expected anything else from a fiat world where fraud is now the status quo?

Thu, 02/21/2013 - 15:06 | 3263165 MachoMan
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Look at it this way, what seems to increase in price and hit peaks just about the time the broader economy rolls over?  One might say that increased "energy" prices aren't a big deal because the price will eventually be reduced to the level of affordability (of course ignoring that producers along the way are having margins compressed to the point of insolvency as well as the "who" gets to afford it).  However, in order to get what you want, the broader economy will need to be in shambles first (moreso than it is already)...  on a fundamental product like that, the destruction to economic activity in general is astounding.  It's gas prices that dictate demand, not vice versa, although elasticity does have a breaking point.

I also suspect (without actually plotting it) that we're becoming more and more susceptible to gasoline price shocks.  In other words, the economy is less and less able to deal with price increases.  Behavior begins changing in reaction to price increases more quickly than previously (less savings/security), but slower to price decreases than previously (slower recovery). 

Thu, 02/21/2013 - 08:36 | 3262637 Edward Fiatski
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Bread without butter, bitchez.

Thu, 02/21/2013 - 08:48 | 3262667 GetZeeGold
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No butter and no ammo......this place is going downhill fast.

Thu, 02/21/2013 - 11:55 | 3263445 gkoinm
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True.  I think they are also underestimating the number of people (like myself) who will not step into another WalMart since they stopped selling ammo....

Thu, 02/21/2013 - 09:51 | 3262850 TheMerryPrankster
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Marie, was told the peasants were getting angry because they had no bread to eat, she replied, if they had no bread let them eat cake.

The French Revolution started 3 weeks later and Marie was beheaded.

Thu, 02/21/2013 - 11:57 | 3263456 McMolotov
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In a world where the specter of inflation can be whisked away by the magic of product substitution, bread and butter will soon be replaced by generic saltines and used vegetable oil.

But at least the government will be able to tell us the CPI is under 2%.

Thu, 02/21/2013 - 08:38 | 3262639 Tango in the Blight
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They better invent robot consumers quickly. The human consumers are increasingly more insolvent and at the end of their credit lines.

Thu, 02/21/2013 - 10:06 | 3262944 Whoa Dammit
Whoa Dammit's picture

A local TV news on-line poll here in Atlanta asked how many miles were on people's cars. 44% had over 100,000 miles, Followed by 28% with 50,000 to 100,000 miles. 

Consumers are about to be literally stopped in their tracks.

Thu, 02/21/2013 - 11:12 | 3263204 MachoMan
MachoMan's picture

Sounds like we need to clean out those old beaters with another cash for clunkers...  might also help with the channel stuffing issue.

Thu, 02/21/2013 - 08:46 | 3262644 Sudden Debt
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.                                                                       J. HANNIBAL



Thu, 02/21/2013 - 09:07 | 3262706 HD
HD's picture

I pity the fool who doesn't get this reference...

Thu, 02/21/2013 - 08:40 | 3262646 venturen
venturen's picture

I saw bernanke piling new stuff into a dumpster in front of all is Wellmart.. 

Thu, 02/21/2013 - 08:41 | 3262647 Son of Loki
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Free money from the Fed for banks is the only thing that matters these days. Walmart is not in that 'favored' group...neither is (was) Hostesss. Walmart needs to follow Bankfein's lead and convert into a bank holding company...then sales/revenue will no longer matter.

Thu, 02/21/2013 - 08:41 | 3262648 John McCloy
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Alright..now when's our next EU bond non repayment crisis set to bring some entertainment?

Thu, 02/21/2013 - 08:56 | 3262682 max2205
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If you don't pay taxes how do you get a refund? 

Thu, 02/21/2013 - 09:08 | 3262710 HD
HD's picture

"Turbo Tax worked for me!"  Tim G. from Washington D.C

Thu, 02/21/2013 - 09:18 | 3262737 Teamtc321
Teamtc321's picture

Simple, shit out a whole slew of kid's.

Thu, 02/21/2013 - 09:19 | 3262738 sunnyside
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Earned Income Credits (EIC), which is in fact not earned, but given freely.

Thu, 02/21/2013 - 11:29 | 3263298 Alpha Monkey
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You live off the GI Bill with no other reported income and claim expenses for school.  Thank you for your moneees! 

Thu, 02/21/2013 - 08:42 | 3262652 Sudden Debt
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Maybe they're all eating their freezedried food they where stacking for that Mayan end of time shit thing?


Thu, 02/21/2013 - 09:44 | 3262822 knukles
knukles's picture

Mommy, can I have some more Tang, please?


mommy, daddys out inthe garage drinking that agent orange and acting goofy again

Thu, 02/21/2013 - 08:43 | 3262654 Ima anal sphincter
Ima anal sphincter's picture

Families are getting raped by the government. "All your money is ours."

How many times must we get kicked in the head before we say ENOUGH?

Thu, 02/21/2013 - 08:43 | 3262655 Cursive
Cursive's picture

Translation:  Our business is entirely dependent on the government, which drove the public into poverty and now sends subsistence checks to the plebs.  At least we drove out local businesses by getting property tax exemptions from muncipalities and counties and municipal bus lines re-routed to our stores, so we own most of the underclass markets!

Thu, 02/21/2013 - 08:59 | 3262688 disabledvet
disabledvet's picture

Gary, Indiana...say hello to the USA. USA? Say hello to Gary, Indiana.

Thu, 02/21/2013 - 09:00 | 3262690 Bobbyrib
Bobbyrib's picture

It wasn't just the government that drove the public into poverty, it was the policies of companies like WalMart to push production overseas to offer the cheapest products on the market. I do not feel sorry for these fuckers one bit. You reap what you sow.

Thu, 02/21/2013 - 10:08 | 3262956 notadouche
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Yeah forcing competition is a bitch when your on the losing side.  How many years was America on the winning side and no one complained then.  Our society is supposedly built on competition that is until the government started picking the winners and losers which threw the entire system out of balance.  Hard to blame Walmart for that.

Thu, 02/21/2013 - 10:17 | 3262991 kridkrid
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I think you're one step removed from the answer. A sort of "what came first, the chicken or the egg".... but Wal Mart simply represented the logical evolution within a system that requires infinite growth on a planet with finite resources. Local retailers weren't capable of the growth that the system required... and certainly locally manufactured products couldn't provide the growth that the system required... SO.... Wal Mart. And if it wasn't Wal Mart, it would have been someone else.

The problem... the system still requires infinite growth... and I'm not sure there is another step beyond "globalization" to get us there.

Thu, 02/21/2013 - 11:18 | 3263228 MachoMan
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Walmart typically sells OTHER PEOPLES' PRODUCTS.  If they offshore in order to meet their profit desires, then so be it...  walmart will then sell goods from wherever the manufacturers decide they want them produced.  Walmart has changed some things about its business model (private label products, partnerships with producers, consignment, etc.), but the gist is that it's simply a brick and mortar forum for others to push their wares.

And don't feel sorry for walmart...  feel sorry for the folks that can't even afford to shop at a low cost leader (although walmart isn't necessarily the lowest anymore on quite a few goods).  Presuming of course they're not deadbeats and their situation is largely derived from poor personal choices.

Thu, 02/21/2013 - 09:06 | 3262704 CPL
CPL's picture

And they are still completely unable to make a profit.


Sad huh?

Thu, 02/21/2013 - 09:30 | 3262773 sunnyside
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I think of this when I think about the post office.  They are almost like a utility.  What are your costs, set your fees, pay a dividend. It cannot get any easier.

I truly don't give a rats ass what you pay your people or 27 layers of management, just know what way your volume is trending to and that is what a stamp is going to cost.  My 14 year old son could balance their books.  You may not like a letter costing 1.50, but if you choose to have labor and management on the pay scale that you do, then so be it.  Let the market decide.  The post office currently is the poster child of why gov't cannot work effectively.  They do not understand P/L, and therefore will not make the hard decisions regarding pricing or expenses.

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