Wal-Mart's Turnaround Story May Be The Real Deal

Bloomberg Gadfly's Shelly Banjo said that she doesn't "give the world's largest retailer praise lightly" given numerous missteps and errors, including letting Amazon.com, Inc. AMZN have "free rein over online commerce."

Further Evidence Of A Turnaround

Banjo even noted that Warren Buffett himself, once a staunch supporter of Wal-Mart's business, has been selling shares of the retailer. So why the sudden change of heart?

Wal-Mart's turnaround story is showing signs of success. Specifically, online sales grew and the company's management team "struck a positive tone" on how its move to pay workers more while simultaneously slashing prices is attracting more shoppers.

Related Link: Was Target's Bathroom Boycott An Unexpected Tailwind For Wal-Mart?

Banjo also said it is "worth pointing out" that Wal-Mart boosted its full-year earnings-per-share outlook from $4 to $4.30 to $4.15 to $4.30. Granted, any upward revision to guidance is positive, the company's guidance "doesn't look as notable" when comparing to last year's earnings per share of $4.57.

"The optimist in me says Walmart's results could be early signs that the company is finally getting serious about what matters to customers right now, even if it means some short-term pain," Banjo stated.

Finally, Banjo did caution that exceeding the Street's expectations in one single quarter is not enough to conclude a turnaround is sustainable. The key question moving forward is if Wal-Mart "lets the pessimists or optimists prevail."

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