Wal-Mart Grinning Big Through the Tough Times

Sales, Margins and Stock Price All Up -- but What's the Reason Behind the Marketing and Merchandising Miracle?

BATAVIA, Ohio (AdAge.com) -- Looking for a silver lining in the economy? It's shining brightly from Bentonville, Ark.

Same-store-sales growth for Wal-Mart Stores is well ahead of dismal levels a year ago. Amazingly, Wal-Mart's margins are up too. And the stock has soared more than 30% in the past year, trading at levels not seen since the turn of the millennium, providing hope that CEO Lee Scott can avoid a net loss during his reign. Wal-Mart has become a popular defensive buy for investors and consumers alike.

The big question: Is Wal-Mart's recent run of improved results more about the marketing or the economy? Most signs point to the economy, though economic distress has dovetailed nicely with the marketing.

An acid test will come Oct. 9, when Wal-Mart releases sales numbers for September, in many ways the worst, or at least scariest, month the U.S. economy has seen since the Great Depression.

But so far Wal-Mart looks to have pulled off a marketing and merchandising miracle, raising same-store sales at its namesake U.S. division at rates considerably better than its one-point-at-best improvement during the past two recessions. . . . more