Reply #6: Wal-Mart's warning unsettles retailers [View All]

NEW YORK - Wal-Mart Stores Inc. unsettled the retail industry Thursday, reporting a sales decline for the first time in 10 years and warning that its holiday sales would be disappointing. The discounter's news, coupled with a jump in unemployment benefit claims, raised concerns about the strength of the retailing sector at a critical time of the year.

Wal-Mart's confirmation of weak November sales and its announcement that its December same-store sales gain would be no better than 1 percent came as the nation's retailers reported an overall mixed performance for the month. Same-store sales reflect business at stores open at least a year and are the industry standard for measuring a company's strength.

Wal-Mart's disappointment was a sharp contrast with results from discount rival Target Corp., which beat Wall Street forecasts, and Federated Department Stores Inc., which far exceeded expectations. Other retailers had mixed sales; J.C. Penney Co. and Costco Wholesale Corp. both fell short of Wall Street projections.

Industry analysts generally believed the world's largest retailer is struggling with its own internal problems, not an industry-wide malaise. Still, the discounter's woes raised the possibility that it would incite increasingly aggressive price wars this season that would slice into retail profits. And a Labor Department report Thursday that showed a surprising increase in claims for jobless benefits last week added uncertainty to the outlook for holiday sales.

http://news.yahoo.com/s/ap/economy