Wal-Mart’s stock rises while Home Depot’s stock falls
Home Depot and Wal-Mart are the 2 largest U.S. retailers. On Tuesday these companies reported very different first-quarter earnings. While Home Depot claimed to have had a 29% drop in profit, Wal-Mart reported an 8% increase. Both companies did admit that the second quarter would be challenging and more than likely fall short of Wall Street targets. For Wal-Mart this is because they will be cutting prices in order to be able to get rid of their Spring clothes. On the other hand, Home Depot said that the erratic weather that we have been having has weakened the housing market and will effect them in the second quarter.
Unfortunately, the Home Depot stores that have been open at least 1 year have had a 7.6% decline. While Home Depot knew that this quarter was going to be rough, they did not know that it was going to be this rough.
On the other hand, Wal-Mart says that clothes and home goods are not selling well and that they are not going to be able to rebound until the back-to-school shopping season. In the first quarter Wal-Mart’s stock was selling for 68 cents per share, but now they are only selling for 63 cents per share. They are hoping that their stock will sell for between 75 to 79 cents per share during the second quarter.