Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



All Hail the Amazing American Consumer!

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

The American consumer seems to have a split personality, buying luxury with aplomb while pinching every penny. Or so it seems ...

Last quarter, I reported on a strange and somewhat disturbing trend. Sales were up at both deep discounter Dollar Tree (Nasdaq: DLTR  ) and luxury retailer Williams-Sonoma (NYSE: WSM  ) , suggesting that the rich were getting richer, and the poor were getting thriftier. That trend seems to have continued, as both companies reported excellent third-quarter results Thursday.

Revenue at Williams-Sonoma rose 11.8%, while same-store sales increased by 8.1%. Gross margin climbed strongly from 34.7% to 38.2%, suggesting that the retailer was able to exert pricing power. On the other end of the retail spectrum, Dollar Tree reported very similar results, with revenue up 14.2% and same-store sales up 8.7%.

The situation isn't isolated to Dollar Tree and Williams-Sonoma, either. Wal-Mart (NYSE: WMT  ) , a short step above Dollar Tree in terms of pricing, had a 1.3% decline in same-store sales at its U.S. Wal-Mart stores, as value-oriented customers sought ever cheaper products. Meanwhile, high-end retailer Saks (NYSE: SKS  ) increased revenue by 4.3%, with the help of a 5.7% jump in same-store sales and a 230-basis-point expansion in gross margin.

Interestingly, Wal-Mart reported a 9.3% leap in its international sales, which the company noted primarily came from China, Japan, Mexico, and Brazil. The implication here is that the U.S. is in dire straits right now (not totally new information), but that other countries, especially in emerging markets, might be faring better.

As for domestic investing, though, any retailers in the middle of the economic spectrum will have some trouble. Companies able to sell profitably at very rock-bottom prices will see market-share gains as more families fall on hard times. But so will companies that cater to wealthier customers who've been largely unfazed by the crisis.

Fool contributor Jacob Roche still shops at Williams-Sonoma, but only with the help of a gift card he's been hanging onto for two years. He holds no position in any of the stocks mentioned. Wal-Mart is a Motley Fool Inside Value recommendation. Wal-Mart is a Motley Fool Global Gains pick. The Fool owns shares of Wal-Mart. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (1) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 20, 2010, at 11:36 AM, madmilker wrote:

    Maybe Lance Winslow was right in what he wrote in that article...

    "The Flow of Trade in a Global Economy" about Wal*Mart.

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1375782, ~/Articles/ArticleHandler.aspx, 10/28/2016 1:03:55 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 3 hours ago Sponsored by:
DOW 18,169.68 -29.65 -0.16%
S&P 500 2,133.04 -6.39 -0.30%
NASD 5,215.97 -34.29 -0.65%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/27/2016 4:00 PM
DLTR $74.45 Down -2.35 -3.06%
Dollar Tree Stores CAPS Rating: ***
SKS.DL2 $0.00 Down +0.00 +0.00%
Saks, Inc. CAPS Rating: *
WMT $69.83 Up +0.24 +0.34%
Wal-Mart Stores CAPS Rating: ***
WSM $46.33 Down -0.32 -0.69%
Williams-Sonoma CAPS Rating: ***