Market Overview

Walmart Blaming the Payroll Tax for Weak February is Bogus and the Numbers Prove It

Walmart Blaming the Payroll Tax for Weak February is Bogus and the Numbers Prove It

Internal emails originally obtained by Bloomberg News generated shockwaves Friday, as Walmart (NYSE: WMT) executives labeled February sales a "total disaster."

The culprit according to the company's execs was the payroll tax hike effective December 31, 2012.

But a broad look paints a much different picture, as Walmart's competitors and other top retailers have reported strong January sales and confident February projections.

Competitors, including Costco (NASDAQ: COST) and Target (NYSE: TGT), reported 4% and 3.1% increases in sales for stores open more than year, respectively.

"Our guests continue to shop with discipline in the face of a slow economic recovery and new pressures, including recent payroll tax increases," Target Chief Executive Officer Gregg Steinhafel told CNBC in a statement.

Other big box retailers like J.C. Penney (NYSE: JCP) and Macy's (NYSE: M) reported higher-than-expected sales numbers, including an 11.7% increase in sales for stores open more than year in the case of the latter.

Pharmacy giants Walgreens (NYSE: WAG), CVS Caremark (NYSE: CVS) and Rite-Aid (NYSE: RAD) recorded strong sales, aided by the high demand for flu shots.

In fact, according to the University of Michigan/Reuters, consumer confidence jumped jumped to 76.3 from last month's 73.8 reading.

The January successes of these retailers in spite of the payroll tax increase come after a weak January for Walmart, as reported by Bloomberg.

Posted-In: Earnings News Retail Sales Economics General Best of Benzinga


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