Last week, Wal-Mart
First-quarter earnings from continuing operations increased 9.2% to $3.7 billion, or $1.09 per share. Wal-Mart's total revenue surged 8.6% to $112.3 billion.
Investors have been watching whether Wal-Mart can get its act together here in the U.S.; the retail behemoth actually did increase U.S. same-store sales by 2.6%.
Wal-Mart is making "price investments" by reducing prices on some goods to draw shoppers from its rivals. This is a common theme among many retailers recently; both Costco and Whole Foods Market
Meanwhile, how much of Wal-Mart's successful quarter parallels Home Depot's
The biggest reason I'd avoid Wal-Mart right now is the recent bribery scandal regarding its Mexican business. Bloomberg covered some companies that have self-reported rather than attempt to sweep such matters under the rug like Wal-Mart did, although it's sadly more common for companies to behave as Wal-Mart.
Unlike Tyson Foods
Such ethics violations pose a huge risk to shareholders. Prosecution can result in major fines, and at the core, this is about something very serious (and negative): corruption. Indulging in bribery says nothing good about the company in question.
I recently spoke highly of Fluor
It's ironic that after years of floundering, Wal-Mart has now reported a quarter that looks better even as the Mexican bribery scandal makes its internal policies for international business look so much worse.
Even as Wal-Mart shares jumped on the quarterly results, the company disclosed SEC and Department of Justice investigations, as well as probes by Mexican agencies. It's also being sued by several shareholders. A quarterly success is no reason to ignore a deeper problem; don't be bribed into a false sense of security.
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