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Post by The Ultimate Nullifier on Feb 3, 2014 7:58:08 GMT -6
Amazon Up, Walmart Down
Two U.S. retailing giants released information on their holiday quarters last week, and the differences are a stark demonstration of trends in mass retail. Walmart warned that its Q4 and fiscal year would be worse than expected, with profits at or below the low end of the range it had provided investors. The company also revealed that its comp store sales for both Walmart and Sam’s Club would be "slightly negative" to the guidance previously provided. Expectations were for flat sales in Walmart and flat to up 2% in Sam’s, so this change will pull the Walmart comp store sales negative, and may do so for Sam’s as well.
Walmart cited cuts to the U.S. food stamp program, which reduced food subsidies to low income people, and winter storms that caused store closures, for the shortfalls in sales.
Amazon, on the other hand, reported Q4 sales up 20% and full year sales up 22%, as the online behemoth continues its growth in share of the U.S. retailing. But that wasn’t enough for investors, who didn’t like Amazon’s projected 13 to 14% growth rate and no profits in the first quarter. The stock was punished Friday, with a loss of 11% of its value.
The sales of the two companies are still far apart, with Amazon at around $74 billion for 2013 and Walmart expected to be around $466 billion, but the differences in growth rate are extreme.
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