Financial Watch

Financial Watch expects sales to surpass expectations this Christmas

It should not have been a surprise to Wall Street when Wal-Mart announced yet another disappointing sales month. This is just the most recent in a string of months where the world’s largest retailer has turned in sales number well below its peers. In November Wal-Mart will break a decade long streak of growing its sales on an annual basis. Although its sales will only drop by 0.1% this November, it signifies even deeper troubles for the retailer as it tries to attract a wider range of customers. Wal-Mart’s push to attract more middle and upper class customers by pushing more luxurious products has clearly fallen flat. Outside of Wal-Mart, shoppers turning out in droves at malls across the country helped to turn in sales numbers 6% over a year ago. Coming into the holiday season, analysts were projecting sales would increase a respectable 5% this holiday season.

A slew of concerns led to today’s steep sell-off. To Financial Watch this looks to be a promising time to move back into the market. The sell-off could last a few more days, but we expect the Dow to hold above the 12,000 mark. Concerns that a slowing economy, weakening dollar, or deteriorating housing market could derail consumer spending appear to be overblown. Financial Watch expects to see sales surpass analyst’s targets by a decent tally this season. It will not be a blowout year, however we are projecting holiday sales to increase by 5.5-6% over last year. For the first time this decade we are starting to see strong gains in real wages. Further the markets are all up double digits on the year. All of this should lead to a better than expected Christmas for retailers.