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Wal-Mart says it's ending its monthly sales reports
Other retailers may follow suit. Analysts say the result could be fewer sharp moves by stocks.
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NEW YORK - Wal-Mart Stores Inc. said Thursday it no longer will report its sales every month, and some investors expect other retailers to follow suit in what could be a sea change in the way the retail industry disseminates information.
Wal-Mart's move "is a loss of a very important indicator," said Peter Brown, vice chairman of consulting firm Kurt Salmon Associates. Its reports "are the best gauge of what is going on with general consumer spending in America."
In tandem with issuing better-than-expected April same-store sales figures on Thursday, Wal-Mart said it was dispensing with the monthly reports it has issued since 1979. The move will better align investors with Wal-Mart's own long-term approach to business and also cut volatility caused by holiday shifts, Chief Financial Officer Tom Schoewe said in a prepared statement.
The company now will issue forecasts for the 13 weeks that roughly track its quarterly reporting periods.
Wal-Mart is not the first retailer to stop issuing monthly sales reports. Over the past year, about a half dozen retailers have done so, but they mainly are specialty retailers such as AnnTaylor Stores Corp., Guess Inc., Bebe Stores Inc., Cache Inc. and Pacific Sunwear of California Inc. Analysts say many of the stores acted because their comparable-store-sales were deteriorating and it is more of a cost drain compared to better-capitalized large retailers.
Macy's Inc., among the biggest retailers in the nation, stopped dispensing same-store-sales figures in February 2008 but started again last October. No other large retailers have indicated they will follow in Wal-Mart's footsteps, but it may just be a matter of time, Brown said.
Volatility certainly can result when a retailer misses expectations. The biggest example Thursday was Hot Topic. The teen retailer did a lot better than most others in the industry by reporting a sales gain of 3.1 percent. But the advance was well below the 7 percent analysts expected, and the company's stock fell nearly 20 percent to $9.94.
Some retailers may not want to keep bombarding investors with bad news. Limited has now posted 20 consecutive months of same-store sales declines, according to Thomson Reuters. J.C. Penney Co. and Gap Inc. have both logged 17 straight monthly decreases. Kohl's Corp., Saks Inc. and Stage Stores Inc. all have 10 drops in a row. Abercrombie & Fitch Inc., which has resisted cutting prices, has reported nine consecutive two-figure-percentage sales decreases, Thomson Reuters said.
"It makes perfect sense for Wal-Mart to stop monthly same-store sales reports," said Brian Sozzi, equity retail analyst at Wall Street Strategies. He expects other businesses to start doing the same.
Sozzi said the moves could lead to fewer sharp moves by stocks and help their performance in the long run as investors become more focused on trends in the companies' business, rather than sporadic shifts.
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