Wal-Mart Stores Inc. (NYSE: WMT) cut its profit guidance this morning saying that weak economic conditions are crimping consumer spending globally. The company reported impressive second-quarter earnings that rose 49% from a year ago, but said that the company expects full year earnings per share in the range of $3.05 to $3.13 a share. The company's initial forecast had been for $3.15 to $3.23 a share. 
Wall Street is a responding in a big and negative way to WMT's poor guidance, with its stock currently 5.5% this morning. The stock has also led the rest of the market lower, with the Dow down 150 points. Wal-Mart is a bellweather stock in the eyes of Wall Street traders and analysts, and the company issuing a warning for the rest of the year does not speak well of the economic conditions in the industry as a whole. As would be expected other stocks in the sector such as Target Corporation (NYSE: TGT) are also being punished due to WMT's poor earnings guidance.
WMT has not been a stock that I have liked for a while now, the company seems to have been behind the curve of late. The concern I do have with this guidance is that the overall economy could prove to be weaker than most analysts and economists are expecting for the second half of 2007. If the economy gets too weak that will be a tough hill to climb for stocks. There are many bulls out there who are hoping that this is a company specific problem and not the sign of many more bad things to come in the overall corporate profit picture. Do you think this is a company specific problem or a sign that the economy as a whole is going to be weaker than we first thought?
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