Here's What Happened When Wal-Mart Stopped Reporting Monthly Retail Sales
The struggling McDonalds Corporation (NYSE: MCD) announced this week that June will be the last month that the global restaurant leader will report monthly same-store sales (SSS) statistics. From July onward, McDonalds will only be reporting SSS on a quarterly basis.
U.S. retail investors might remember a similar announcement from another major global company a few years ago: Wal-Mart Stores Inc (NYSE: WMT).
Starting in May 2009, Walmart stopped releasing monthly sales reports, and the market now settles for four quarterly reports per year. At the time, Walmart argued that the move was intended to reduce share price volatility.
“This decision aligns investors with the long-term view we take to build shareholder value. We feel this also will reduce the intra-period volatility related to events such as calendar shifts,” Walmart’s CFO Tom Schoewe explained in 2009.
Walmart was only a part of the wave of retailers that decided to stop reporting monthly sales numbers long ago, including important economic bellwether companies such as The Home Depot Inc (NYSE: HD), Lowe’s Companies Inc (NYSE: LOW), Best Buy Co Inc (NYSE: BBY) and Target Corp (NYSE: TGT).
For restaurant shareholders who appreciate transparency, McDonalds’ decision might come as no surprise. Restaurant competitors Yum! Brands Inc (NYSE: YUM), and Restaurant Brands International Inc (NYSE: QSR) do not report monthly sales figures.
Good For Shareholders?
McDonalds, which has reported 11 consecutive months of falling global sales, and the company’s shareholders are hoping that the move to eliminate monthly reporting will turn out better than Walmart’s move did in the short term.
In the six months following Walmart’s announcement in May 2009, the stock rose just 2.7 percent while the S&P 500 surged more than 17.8 percent.
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