Wal Mart Books

Throw This Stock Away

The song remains the same
The Bentonville Behemoth has a problem. Yesterday's quarterly report delivered another stinker at the store level . U.S. comps fell for an insane eighth consecutive quarter.

Apologists will argue that this decline doesn't matter, because Wal-Mart's still finding a way to make the bottom line work. The world's largest retailer remains a master of lightning-quick inventory turns, and no one will ever match its economies of scale.

Wal-Mart has its own excuse -- but you won't believe it. "Our customers are consolidating trips due to higher gas prices," the company explained during yesterday's conference call. Pain at the pump could certainly make drivers want to curb their outings, but I'm still not buying this company line at all. For starters, the spike earlier this year in gas prices doesn't explain the seven quarters of negative same-store sales before that.

The competition's also doing notably better. TJX (     ) came through with positive comps last week, raising its earnings guidance for the fiscal year. Few other players in economically priced apparel are blaming gas prices for any woes, beyond Wal-Mart.

There's more to Wal-Mart than clothing, of course. Folks still come to the superstore chain that Sam Walton built for groceries, electronics, and media. Food sales are holding up, but we've seen the decay of the giants of consumer electronics . All of the space that Wal-Mart now devotes to selling books, DVDs, video games, and CDs will grow smaller as digital delivery takes over.

Wal-Mart can learn a lot from Sears Holdings (     ) . Sears has posted negative comps on an annual basis over the past decade. I'm sure it had plenty of valid excuses at first, but they dried up after investors stopped believing them.

I believe this is the beginning of a gradual fade for Wal-Mart. In time, the early symptoms will grow obvious. It failed to recognize the impact of e-commerce specialists (especially in a time of pesky gas prices). Wal-Mart responded too slowly to the digital revolution. It never had a lick of fashion sense. It never found a marketing team able to spin the Wal-Mart shopping experience as anything other than an excuse to snag goods for dirt cheap prices.

I realize that Wal-Mart is a popular recommendation across many of our newsletter services, so I'd love to be wrong in this prediction. It would be great to see Wal-Mart turn things around, or at least fade away slowly enough to make current investors a fair deal of money. And in fairness, the company has been no slouch abroad.

Walmart Marvel Universe Goliath and Marvel Masterwork books ...

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