Wal-Mart Ends Monthly Same-Store Sales Report
Wal-Mart
is not the first retailer to decide against reporting monthly same-store
sales numbers but being the biggest means it is going to get a lot of attention
for doing so.
Tom Schoewe, executive vice president
and chief financial officer for the company, explained the decision in
a press release. “At the start of this fiscal year, Wal-Mart revised
its approach to providing guidance for sales. We went from providing guidance
for monthly sales to forecasting a guidance range for our U.S. businesses
for the full 13-week period. Moving forward, 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.”
“Wal-Mart
was built on a foundation that manages for long-term success,” Mr.
Schoewe added. “This decision aligns investors with the long-term
view we take to build shareholder value. We feel this also will reduce
the intra-period volatility related to events such as calendar shifts.
Reporting sales quarterly also places us in line with most other large
retailers.”
While
Wal-Mart laid out its rationale for the change, not everyone was happy
with the decision. An opinion piece on TheStreet.com, referred to the decision
as “yet
another abuse of investors” by a large publicly traded company.
Peter
Brown, vice chairman of consulting firm Kurt Salmon Associates, called
Wal-Mart’s decision “a loss of a very important indicator.” He
told Dow Jones, “They (Wal-Mart’s monthly same-store numbers)
are the best gauge of what is going on with general consumer spending in
America.”
Brian
Sozzi, equity retail analyst at Wall Street Strategies, told Dow Jones,
that Wal-Mart’s move makes sense and he expects “others to start falling
under the umbrella.”
Mr.
Sozzi said reduced reporting by Wal-Mart will make it more difficult for
investors to get information on the company, “but a little extra footwork
on investors’ parts will help make up for it.”
Discussion
Questions: What are the ramifications of Wal-Mart Stores decision to
not report same-store sales on a monthly basis? Does reporting monthly
adversely affect retailers that do it?