Wal-Mart Stores, Inc. (WMT), Macy’s, Inc. (M), Target Corporation (TGT): Will These Stocks Perform in the Long Run?

The retail business seems to be having its fair share of problems. Numbers coming in for the last quarter have been disappointing, to say the least. What then should investors do–cash out or stay? Let’s find out.

Losing its shine?

The first among the major retailers to report numbers this season was Macy’s, Inc. (NYSE:M).

After reporting some superb numbers in the previous quarter, the company failed to impress investors this time around. Net sales totaled $6.1 billion, down 0.8% from $6.1 billion in the previous year. Net profit amounted to $281 million, compared to $279 million in the prior year. At $0.72 per share, diluted earnings were up 7.5% from the prior year. Weak consumer spending was stated as the main cause behind Macy’s, Inc. (NYSE:M) poor performance. According to top executives at the company, consumers are spending more on big purchases like cars and homes at the moment. As a result, demand for retail items such as apparel, footwear and electronics are on hold. In the next two quarters, the company expects comparable sales to grow by 2.5%-4%.

A wee bit better

Wal-Mart Stores, Inc. (NYSE:WMT), which also released its last quarter numbers this month, only did slightly better. Wal-Mart Stores, Inc. (NYSE:WMT)’s net sales totaled $116.2 billion, up 2.4% from the prior year. Net income saw a modest growth of 1.3% from the same quarter the previous year. Diluted earnings amounted to $1.24 per share, as opposed to $1.18 last year. Wal-Mart Stores, Inc. (NYSE:WMT)’s main cause of concern has been the payroll tax hike. The company has also tapered its expectations for the year ahead.

Canadian woes

Target Corporation (NYSE:TGT), the latest among retail brands to report low numbers, has another factor to blame. The retailer’s expansion plans in Canada have proved to be more drawn out than anticipated, putting a pressure on the company’s profits. At $611 million, net earnings for its last quarter were down 13.2% from the previous year. Total revenue amounted to $17.1 billion, producing 2% year-over-year growth. The 2% hike in payroll tax has also been a concern for Target Corporation (NYSE:TGT), which has cut down its outlook for the rest of the year.

Plans and such

With customer spending occurring in waves and the economic recovery still on hold, the best bet for the retailers would be to focus on driving sales by making their products and offers more attractive.