By Kit R. Roane
(Fortune) -- It certainly looks like happy days are here again. Many of the nation's biggest retailers, including Saks, Hewlett-Packard, Home Depot, and Target have released cheery sales reports. April's jobs reports showing a slight increase in the workweek and pay for workers, and more hiring across the board.
And then there is Wal-Mart, whose happy yellow face switched to a grimace when it released first quarter sales on Tuesday. Although international growth helped push revenues up 6%, sales at U.S. stores fell 1.4% from the same period last year. And the company had no one to blame but its shoppers. "More than ever, our customers are living paycheck to paycheck," said Tom Schoewe, the chief financial officer.
So who are you supposed to believe? In this case, Bentonville. When Wal-Mart (WMT, Fortune 500), an economic bellwether, notes that customers can't afford the gas to get to the stores and that they're increasingly using food stamps when they get there, things are bad.
True, other consumer-dependent companies are doing better, but by how much? Hewlett-Packard (HPQ,Fortune 500) made its numbers by selling hardware to corporations, not consumers. Home Depot (HD,Fortune 500) was pulled forward by do-it-yourselfers buying small items and by homeowners making one-off summer purchases of new landscaping tools and grills; big ticket items are still sitting collecting dust, while the contractor business remains weak. Saks (SKS)' results were impressive, but it sells luxury goods to a sliver of the American demographic, one that benefitted most from the psychologically important stock market rise earlier this year.
The problem is that both the economy and consumer sentiment remain shaky. Even Target (TGT, Fortune 500), which reported better than expected results yesterday, was forced to concede that. While touting his company's success, Chief Executive Gregg Steinhafel, noted that "We believe that both are still somewhat unstable and fragile and will likely continue to experience occasional setbacks as the year progresses," he said. >>>
