If you can't get enough of the big gray boxes that line our nation's highways, then you should be happy with Wal-Mart's
It will certainly be enough to stay ahead of competitors in the space, such as Target
It's not hard to figure out why. Even without the $1.5 billion boost from foreign exchange gains, Wal-Mart's international revenue growth is outpacing domestic sales by a hefty margin. For the first half of this year, international revenues constituted more than 19% of Wal-Mart's total sales. That performance helped perk up margins earlier this year.
But a bigger foreign presence isn't necessarily the final antidote for sagging comps back at home. Operating margins were 5% overseas so far this year. Sure, that's a lot better than the 3.4% at Sam's Club, but it's not nearly as juicy as the 7.5% enjoyed by domestic Wal-Mart. Moreover, those pesky foreigners aren't always so excited to have America's gorilla retailer, or its local surrogate, roll over the indigenous merchants.
Time will tell whether this strategy pays off. Until then, investors need to keep an eye on the firm's same-store sales. If growth is coming mainly via expansion, the shares should be priced accordingly.
For related Foolishness:
- Check in with the Wal-Mart of the Gods.
- Other than Waltons, who are our big, beefy billionaires?
- Interested in watching Wal-Mart?