Wal-Mart Stores, Inc. (WMT), Target Corporation (TGT): Sell these Three Companies Before a Drop

Page 1 of 2

As the North American economy recovers, companies such as Dollarama, Wal-Mart Stores, Inc. (NYSE:WMT), and Target Corporation (NYSE:TGT) will likely have a hard time raking in the profits to which they were accustomed during the recession.

Wal-Mart Stores, Inc. (NYSE:WMT)

Dollarama earnings fall

On June 12 Dollarama reported its fiscal first quarter earnings, which were off of analyst predictions for the first time since the firm’s IPO in October 2009. The median estimate was for the company to come out with earnings per share of CAD $0.67, but the company reported CAD $0.62. In the 14 previous quarters, the Canadian company beat analyst expectations.

According to Edward Jones & Co. analyst Bobby Hagedorn, increased expenses were the main reason for the sour performance. “It was a disappointing quarter. The biggest surprise for us was the operating costs, which were way higher than what we expected,” he told Bloomberg. “They attributed it to costs from the increased pace of store openings.”

The previous steady growth for the company was a sign of the times, with profits soaring as a new class that was hard-hit by the recession poured into stores looking for deals. But now that those people are in more solid financial positions, Dollarama isn’t likely to see the type of profits it had in recent years. The company opened 21 stores in the first quarter, and 85 stores in the last year. These outlets cost a lot of money to set up and train staff, so expect Dollarama’s earnings to be down for at least the next three quarters, despite what may happen in the economy.

After reaching nearly $80 per share early in mid-May, Wal-Mart Stores, Inc. (NYSE:WMT) has stumbled to its current level of around $75 per share following a dim earnings report. Sales increased by just 1% in the fiscal 2014 first quarter earnings released in May. While management at the firm cited a delay in payroll tax and one less selling day than the same period last year as the catalysts for the poor performance, those could be scapegoats for the real reason: people aren’t bargain shopping as much. However, the report could be a one-off, as the firm is getting a hold on the grocery business and could drive up sales in that area in the months ahead.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 Top Reasons For Getting Fired

The 3 Best States to Start an LLC

10 Jobs That Allow You to Travel

7 High-Paying Jobs You Can Do From Home

12 Best Cities to Shop in USA

10 Best States To Practice Medicine

The 10 Best States to Have a Business

The 12 Most Expensive Apple (AAPL) Apps in the Market

The 10 Richest Billionaires in the World

10 Biggest Kickstarter Failures

The 10 Best Places to Work At

The Top 10 of Google Inc (GOOGL)’s Most Expensive Acquisitions

13 Best Cities to Visit in South America

10 Most Expensive Works of Art of All Time

The 10 Richest Banks in the World

The 10 Best-Paying Jobs in America (2014)

7 Most Expensive Foods in the World

The World’s Top 10 Earning Authors

Five Wicked and Very Expensive Items (and Other “Stuff”) Sold on eBay

10 Biggest Celebrity Bankruptcies

The Top 10 Highest Paid CEOs in 2014

The 10 Most Expensive Real Estate Cities in America

10 Most Expensive States To Live In America

The 10 Best Airlines in the World

The 10 Best-Selling Cars in 2014

The 10 Best Industries to Invest In

The 10 Most Expensive States to Own a Car In

Top 10 Business Schools in US: 2014 Rankings

Top 20 Female Billionaires in 2014

6 Movies That You Should Watch to Better Understand The Cold War

Top 15 Best Paying Jobs for Women in 2014

Top 6 Things Rich People Do Differently Every Day

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!