What Walmart and Amazon Stock Prices Tell About the Holidays

December 24, 2012 by 247wallst

Source: courtesy of Walmart

What happened to bricks-and-mortar and e-commerce sales this holiday season? If Wall St.’s opinion has validity, online operations did well and old-school stores did not. The price of Wal-Mart Stores Inc.’s (NYSE: WMT) shares fell 1% over the past month. Amazon.com Inc.’s (NASDAQ: AMZN) were 8% higher. The S&P 500 rose by 3% in the same period.

While there is chance Walmart did well online, it would not be nearly enough to offset weak store sales. ComScore shows that Walmart.com is the most visited e-commerce site in the United States after Amazon’s and eBay Inc.’s (NASDAQ: EBAY). However, online sales are less than 10% of Walmart’s total.

Walmart’s shares are not the only retail stocks that have taken a beating in the past month. The shares of major rival Target Corp. (NYSE: TGT) are off 6%. Higher end retailer Macy’s Inc. (NYSE: M) shares have dropped more than 8%. The stock of industry dog Sears Holdings (NASDAQ: SHLD) are off by 14% in the past month.

By contrast, eBay’s shares are 6% higher over the past month.

It would be wrong to say that Internet sales at major bricks-and-mortar retailers have done poorly this year. However, they cannot have been enough to significantly boost total sales at these companies because, as is true with Walmart, those sales are a modest portion of total revenue.

Despite pessimism about the fortunes of the old-line retailer, their e-commerce traffic has, in many cases, begun to move in the right direction. ComScore reports visits to the Best Buy Co. Inc. (NYSE: BBY) site are up 85% from October to November. Traffic to Kohl’s Corp. (NYSE: KSS) rose 56% for the same period. Unique visitors to J.C. Penney Co. Inc.’s (NYSE: JCP) site were 48% higher.

Still, the holiday sales picture is not a clear one this year. Analysts say the increase in traffic to tradition retail sites may reflect foot traffic to their stores. That is, some shoppers go to the Best Buy site to find merchandise, then try to beat the electronic retailer’s price, probably most often at Amazon.

On balance, Wall St. does not believe that bricks-and-mortar stores can undo the damage that Amazon has done, even if their online traffic has risen.

Douglas A. McIntyre