4/11/2008

The Easter Bunny Stayed Home In March
By Brian Sozzi

There is much to be said about getting back to basics in life and business.  Serving as an example for the latter is retail behemoth Wal-Mart Stores Inc. (WMT), which reenergized its business late in 2007 and is benefiting immensely at the present time.  Amidst the waning consumption trends from many U.S. households, Wal-Mart continues to execute as a result of its price leadership position.  This was quite evident in the company’s March sales data, which fell short of the consensus estimate due to the shift in the Easter calendar, but 1Q guidance was taken higher as a result of disciplined inventory management.  We have had a buy rating on shares of Wal-Mart since late last year; the stock has surged since then.  For a copy of our more recent assessment on the retailer, please send an email to brian.sozzi@wstreet.com; be sure to include a good daytime phone number.

Having said this, we are still actively pouring through the sales data but are left with the impression that the situation could have been much worse when taking into account the following tidbits.

1. Easter calendar shift resulted in lost sales for some retailers (stores were closed on Easter)
2. Adverse weather conditions hampered demand for summer related gear
3. Consumer confidence is in the doldrums

There were a few other standouts among the retailers in our coverage universe and we plan to share some insight on them in upcoming website exclusives.  Stay tuned.