2:22 Coming...LOL...WMT Comps Disappoint
DB-(WMT) Reit Buy Investment Conclusion: Wal-Mart reported April comps of +4.4% vs. +4.6% LY, on the low end of the +4-6% plan, as expected. This was slightly below the +4.5% Street est., hurt by the discount store comp of +3.6%, which missed management`s +4-6% plan. We expect the company to regain momentum in May, benefiting from the easier +2.1% comparison. As a result, we maintain our Buy rating. Discount Stores Weak. At the discount stores, comps increased +3.6% vs. +5.1% LY, below the +4-6% plan. Comps were hurt by one less Easter week and the tougher +5.1% comparison, which was one of the strongest comp increase in 2003. We also believe comps were impacted by the higher oil prices which have been hurting the low-end consumer more. All of the dollar stores reported below-plan comps, reflecting this same trend. At Sam`s Club, comps increased +8.3% vs. +2.0% LY, well ahead of the 6.4% consensus est. Reducing FQ1:04 by a Penny. We are reducing our Q1 EPS est. by a penny to $0.49 from $0.50 to reflect the sales shortfall and lower than expected margins.
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