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Non-Tech : Wal-Mart -- Ignore unavailable to you. Want to Upgrade?

To: Terror who wrote (320)	2/6/1998 1:36:00 PM
From: Ken Turetzky	Read Replies (2) \| Respond to of 1166

DLJ Retail Report: WAL-MART (WMT: $42 13/16)# Rating: Market Performance EPS Estimates 1/97A 1/98E 1/99E P/E 1/98E 1/99E $1.33 $1.54 $1.75 27.8x 24.5x In January, Wal-Mart's comp sales robustly increased at the discount stores (up 7.6% and above expectations) and Sam's Club (up 2.7% and in-line with expectations). With robust fourth quarter results, a good merchandise mix, and solid sell through of inventory, there is a possibility that the company can beat our $0.55 fourth quarter estimate by a penny or two. Not surprising, this stock continues to rise as it represents the safety that investors are looking for as they search out retailers. February comps are expected to be in the mid-single digits at the discount stores and in the low single digits at Sam's. Overall, January sales were on the high end of expectations. The post- holiday sales were good, as WMT's holiday merchandise was cleaned out, making room for the new Spring merchandise. Cold weather product sales improved from the Christmas season, but not as much as in the previous year, as ice storms in the Northeast and Canada drove cold weather merchandise sales at the expense of several temporary store closings. By division, the discount stores has sales above expectations, but the weighting in the month and quarter mitigated expense leveraging. Strong product lines included consumables, food, electronics, and apparel at the discount stores. The Clubs reported sales in-line with expectations as food, appliances, and apparel sold well. Membership sales outpaced overall sales growth for the month, reflecting the value members associate with the clubs. Internationally, Canada experienced strong double digit growth despite the ice storms, while Puerto Rico and China (later Chinese New Year) had good sales growth. Schroder & Co. TABLE 3: SALES BY COMPANY Company Actual Comments WAL-MART 6.4% Comfortable with above-consensus EPS ($43, "2" RATED) estimate of $0.56 (versus $0.48). Discount Stores 7.6% Above planned 5%-6% range contributing to good clean up of clearance merchandise. Supercenters comped in line with the discount stores. Inventories were down on a comparable-store basis at the end of the quarter.