Every year companies like Amazon.com, Inc. (NASDAQ:AMZN) and Wal-Mart Stores, Inc. (NYSE:WMT) try to cash in on the holiday season by providing a lot of discounts. But both the companies faced a lot of issues in 2013, with Amazon apologizing to many of its customers for delivery mishaps and delays and Walmart reporting disappointing earning numbers for the 4Q 2013, due to larger discounts and smaller margins. Both the companies kicked off their holiday season Black Friday sales right after Haloween. FBN’s Jo Ling Kent, Eagle Bay Capital Founder, J.C. Parets and Belus Capital Advisors CEO, Brian Sozzi talked on Fox Business about this.
“It’s happening right before Thanks giving and it’s an all-out retail war is what we are seeing here. Amazon, of course is offering all kinds of good deals. […] They (Walmart) say they are going to have free shipping on the top 100 items, […] plus, they are cutting the price of 20,000 items and they are even thinking about doing price matching,” Kent said.
Kent mentioned that Wal-Mart Stores, Inc. (NYSE:WMT) is doing everything possible to steal the limelight from Amazon.com, Inc. (NASDAQ:AMZN) and attract many customers to their shop. She said that this will be an all-out direct war between Wal-Mart Stores, Inc. (NYSE:WMT) and Amazon.com, Inc. (NASDAQ:AMZN). She added that this might affect the margins for Wal-Mart Stores, Inc. (NYSE:WMT).
As Wal-Mart Stores, Inc. (NYSE:WMT) keeps cutting their margins in order to sell big during the holiday season, can they make enough profits even if they sell big?
Sozzi feels that holiday season might not be as robust as Wal-Mart Stores, Inc. (NYSE:WMT) mentioned during its press release. Walmart mentioned that they bought a lot items and betting big on consumers to buy them all. He added that this strategy blew in their face last year and reported a disappointing earnings number.
Sozzi thinks rather than buying from Walmart or Amazon, it would be better to buy from shops like Foot Locker or Nike.
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