• San Francisco Fed Reserve Bank President Yellen to speak about the U.S. economic outlook at the University of California/San Diego with a Q&A session.
• Aracruz Cellulose (NYSE: ARA) to report Q2 earnings; conference call at 11:00am.

• Richmond Fed Reserve Bank President Lacker to speak about U.S. economic outlook to the National Economists Club in Washington with a Q&A session expected.
• Gulfmark Offshore, Inc. (NYSE: GLF) to discuss the acquisition of Ridgon Marine at 9:00am.
• Alcoa Inc. (NYSE: AA) to report Q2 earnings; conference call at 5:00pm.
• Hansen Natural Corporation (NASDAQ: HANS) to give Business News update at 5:00pm.

• Wolverine World Wide, Inc. (NYSE: WWW) to report Q2 earnings; conference call at 8:30am.
• Hot Topic, Inc. (NASDAQ: HOTT) and Zumiez Inc. (NASDAQ: ZUMZ) to hold June sales conference calls at 4:00pm.
• Ruby Tuesday, Inc. (NYSE: RT) to report Q4 earnings; conference call at 5:00pm.

• Wal-Mart Stores, Inc. (NYSE: WMT) and The Gap, Inc. (NYSE: GPS) to hold June sales conference calls at 8:00am.
• Marriott International, Inc. (NYSE: MAR) to report Q2 earnings; conference call at 10:00am.
• San Francisco Fed Reserve Bank President Yellen to speak in Portland with a Q&A session at 3:30pm.

• General Electric Company (NYSE: GE) to report Q2 earnings; conference call at 8:30am.
• Infosys Technologies Limited (NASDAQ: INFY) to report Q1 earnings; conference call at 8:30am.

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According to this Wall Street Journal (subscription required) piece, a member of the Circuit City Stores, Inc. (NYSE: CC) board has left the building. Lead outside director Mikael Salovaara resigned yesterday. Can you blame the guy?

No you can't. Circuit City doesn't have any sort of game plan at the moment, and it's sinking fast. The company's stock is priced at $2.31 as I write this. The goofy Blockbuster Inc. (NYSE: BBI) transaction is gone (for now, at least...there are reports saying that it could be resurrected at a later date, although I don't buy that it will happen at all). It isn't competing effectively against Best Buy Co., Inc. (NYSE: BBY) and Wal-Mart Stores, Inc. (NYSE: WMT). In short, Circuit City is a Titanic-like electronics retailer that doesn't know how to keep its ship from hitting icebergs.

So this resignation isn't surprising. Of course, is there any way to make money off the stock? I do believe there is downside to come on the share price, which would therefore imply that shorting it could work out. Alas, I wouldn't recommend it. You just know that some company and/or financial entity out there might come in at any point and make a bid, and the shares could skyrocket. Although the Blockbuster deal didn't make sense, it doesn't mean that there isn't some transaction scheme out there that would be logical. Circuit City is a stock merely to watch out of curiosity, it's not one to do anything about.

Disclosure: I don't own any company mentioned here; positions can change at any time.

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This post is part of our Big Company, Small Town series, featuring large companies and the small towns in which they are headquartered.

If you like to save money on gas and live near a Wal-Mart in the Southeast and Midwest, chances are you are filling up these days at stations operated by Murphy Oil Corp. (NYSE: MUR), which is headquartered in the small town of El Dorado, Arkansas.

Those Murphy USA gas stations, located in parking lots of Wal-Mart Stores (NYSE: WMT), are just a small part of Murphy's many energy-related businesses. Murphy Oil is a giant, publicly-traded oil and natural gas exploration and production company with operations as far afield as Malaysia and Ecuador. Much of its U.S. drilling and refining is done off the shores of Louisiana, and some of that equipment was damaged during Hurricane Katrina. Sales in 2007 were more than $18 billion and the stock is up 60% in the past year. The company was recently ranked No. 134 in the Fortune 500 (to put that in perspective, Google is ranked 150 and Nike 153).

Corporate headquarters to all this (as well as a timber company that was spun off from Murphy in 1996), is El Dorado, population of 20,000. A boom town in the 1920s when oil was discovered, El Dorado has a colorful history and currently boasts summertime reenactments of a Wild West style gun fight on the courthouse steps, as well as a historic "haunted" theater. The town participated in the federal "Mainstreet" program, which provides grants for restoring historic downtowns, suggesting that the downtown was once in rough shape, but has since been prettied up.

The company is very active in the educational arena. Amazingly, in 2007 it announced a program called the El Dorado Promise, in which it pays for college for all El Dorado high school graduates (who meet some minimal qualifications), up to about $6,000 a year (or the cost of state schools). Murphy also sponsors a lecture series at Southern Arkansas University's College of Business.

As an aside, Murphy Oil Soap, a staple in our our home for cleaning wood floors, has no relation to Murphy Oil. The 100-year-old solution gets its name from founder Jeremiah T. Murphy who acquired the recipe to a German soap made from vegetable oil back in 1905. It was acquired by Colgate-Palmolive (NYSE: CL) in 1991.

Be sure to check out more Big Company, Small Town posts.

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Kroger (NYSE: KR) is one of the nation's largest retail grocery chains. It operates nearly 2,500 supermarkets and multi-department stores in 31 states, under such local banners as Kroger, Ralphs, Fred Meyer, Fry's, Dillons, QFC and City Market. The firm also operates about 778 convenience stores, 392 fine jewelry stores, 723 supermarket fuel centers and 41 food processing plants. Despite diversification moves, Kroger food stores still account for about 85 percent of sales. Wal-Mart (NYSE: WMT) and Safeway (NYSE: SWY) are major competitors.

The firm pleased investors last week, when it reported fiscal Q1 EPS of 58 cents and revenues of $23.11 billion. Analysts had been expecting 55 cents and $22.32 billion. The EPS figure was a company record. Management also offered in-line guidance for FY09 earnings and said that about $643.6 million remained under the $1 billion stock repurchase program announced in January.

KR shares popped on the news and then began defining a bullish "flag" consolidation pattern. Stocks often leave flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.

Brokers recommend the issue with three "strong buys", five "buys", two "holds" and one "underperform". The KR P/E ratio (15.86), Price to Sales ratio (0.26), Price to Book ratio (3.76), Price to Cash Flow ratio (7.15), EPS Growth rate (23.28%) and Return on Equity (24.04%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 83% of the outstanding shares. The stock is one of those used to calculate the S&P 500 Index. Over the past 52 weeks, it has traded between $23.39 and $30.00. A stop-loss of $24.90 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold positions in any of the stocks mentioned above.

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This post is part of my series featuring established companies and the smaller, more aggressive or innovative rivals that may eventually succeed them.

Who would have thought that privately held, 2002 upstart Vizio could upset the LCD TV market and knock giant Sony (NYSE: SNE) off of its perch?

The world of televisions is transforming itself to flat-panel, high-definition and big screens. Vizio was founded in 2002 and is taking major market share from Sony and former second fiddle Samsung. Vizio's promise to its customers is simple -- small is big. The company has only 85 employees, mostly in sales and marketing, and outsources the manufacturing to other suppliers. The key to the Vizio story is getting the product through as many retail doors as possible.

The company has signed up a couple of big wigs in the retail sales channel: Wal-Mart (NYSE: WMT) and Costco (NASDAQ: COST), to go along with Sears (NASDAQ: SHLD) and Circuit City (NYSE: CC). Vizio is also available from Dell Computers e-commerce web site (NASDAQ: DELL). Vizio understands it's all about distribution, distribution, distribution.

Vizio has taken the marketing position that television decisions typically are the domain of the male of a household and, as such, has partnered up with the NFL. Football and big screen TVs are synonymous. Vizio has signed All-Pro running back LaDainian Tomlinson of the San Diego Chargers to be its spokesperson. Tomlinson is regarded as both a fine gentleman and perhaps the greatest running back since Barry Sanders. His wholesome image is magical to Vizio's marketing program.

Vizio offers the lowest prices for the new LCD TVs. The company operates with low overhead and very effective, but low-cost marketing plans. Recent market share numbers show Vizio at 14.5%, easily topping Sony. Vizio's actual numbers are hard to find but the 2nd quarter of 2007 saw the company sell 606,000 units, up 76% from the previous year, while Sony fell from 412,000 units to 253,000 units in the same period.

Vizio has managed to capture the lion's share of new unit sales, but has not disclosed its profitability numbers. The margins in the industry are thin to begin with, which explains Vizio's low expense structure.

Still, it's hard to imagine this young company knocking Sony around the block. Now Sony knows what it's like to tackle LaDanian Tomlinson!

Georges Yared is the editor of GameOnInvesting, a free service devoted to helping investors spot game-changing stocks before they breakout.

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This post is part of my series featuring established companies and the smaller, more aggressive or innovative rivals that may eventually succeed them.

With over 4,000 stores in the United States ranging from warehouse-concept Sam's Club to discount retail stores to supercenters, Wal-Mart (NYSE: WMT) is by far the largest retailer in the U.S. -- and the world. So where does Wal-Mart go from here? International expansion has become the true growth engine for Wal-Mart as it dots the landscapes of other nations. The company has embarked on a series of initiatives these past 15 months to spruce up the stores, install better lighting and offer a more competitive brand of consumer goods. Recent same-store sales have validated these improvements.

Wal-Mart has been the beneficiary of a more cost-conscious consumer in this economic slowdown. Yet it can only squeeze so much growth out of its existing locations. And if it opens more stores, it risks cannibalizing the revenues of its existing stores.

Enter Fred's (NASDAQ: FRED). This quiet, regional concept has been around since 1947. Fred's is headquartered in Memphis, Tennessee, and has its base in 15 Southeastern states. Fred's has 659 discount stores and 280 pharmacies in its system -- with room to grow. Fred's has 24 franchisees, which is a quicker way to expand the concept while not draining the corporate coffers.

Fred's offers a full range of apparel, food, sporting goods and other general merchandise in its system. The company's philosophy is: quality merchandise at a discount price. The stores are well lit, organized and make for a pleasant shopping experience.

Recently, the company embarked on a "clean-up" strategy of closing unproductive stores and pharmacies. Currently, the company has shut down or is in the midst of shutting down 75 such facilities with the idea of replacing them with newer and better located stores. Recent same-store sales for May were up 3.4%, while total sales were up 8%, bearing out the strategy.

Fred's has the "room to grow" quite substantially over the next decade. With units only in 15 states, the discount concept can triple its store base and still not encounter any saturation issues. Not ready to knock Wal-Mart off of its perch just yet, Fred's is emerging as a retailer with a national vision.

Georges Yared is the editor of GameOnInvesting, a free service devoted to helping investors spot game-changing stocks before they breakout.

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Welcome to the 66th installment of The Wal-Mart Weekly, a column dedicated to bringing you insight, wit, facts, results, opinions, and just a bit of everything else when it comes to a very hot topic these days: Wal-Mart.

This week, I'll be examining Wal-Mart Stores Inc. (NYSE: WMT) and the reputation the world's largest retailer has. Wal-Mart's roots from the backyard of a small Arkansas town into the world's largest company in less then five decades is nothing short of amazing -- like it or not.

But, with such rapid growth, how has the company's reputation fared during this journey? Harris Interactive's latest "Reputations of the Most Visible Companies" (PDF download) sheds a little light on this area. Although Wal-Mart is currently experiencing a decent period of sales and profit (due to customers flocking to low prices), the company still has a tarnished image in much of the world. Is it deserved? You be that judge.

The biggest target on the biggest back

It's bound to happen. Wal-Mart, just like Microsoft Corp. (NASDAQ: MSFT), is the perfect target for legions of critics. It's huge, exerts tons of power of its suppliers and in turn has immense power over its customers. Even in a free country and capitalist society where consumer choice reigns, the consumer also must choose de facto standards for certain things. In the realm of computers, I would argue that it's hard for a normal consumer to simply purchase a PC without Microsoft's Windows operating system already installed. Bang -- de facto standard in place.

How about grocery shopping and general merchandise shopping? There are more competitors here due to the commodity status of most general merchandise items. Milk, bread, flat-screen televisions, face cream, spray starch, and baby wipes can be picked up from a litany of grocery stores and discount stores, from Kroger Co. (NYSE: KR) to Dollar General to Wal-Mart to Target Corp. (NYSE: TGT).

What makes a consumer choose Wal-Mart over all the rest, in the age of free choice? Sheer location amount? The fact that most Wal-Mart locations are "one stop shops" for just about everything? Something else? Wal-Mart's time and time again creed has been to save the customer money at all costs. After the recent "Always Low Prices," the retailer changed its corporate tagline to "Save Money. Live Better," which implied that it helps the lives of its customers by passing along the best prices possible. That, among many other strategies, made Wal-Mart into what it is today, but at the same time during all this growth, it found many arrow-shooters that constantly shot projectiles into the large target on Wal-Mart's back.

Where Wal-Mart ranks in the U.S. regarding its reputation

One would think that Wal-Mart's prowess in the U.S. market and its enormous growth in the last two decades would have given it a wide customer appeal that would be second to none, regardless of the critic community that has developed. Not true -- Harris Interactive states that Wal-Mart is ranked at #44 in the list, behind such notable names like Google, Inc. (NASDAQ: GOOG) at #1, Toyota Motor Co. (NYSE: TM) at #15 and Best Buy, Inc. (NYSE: BBY) at #30.

In the six areas measured by the report:

• Emotional appeal
• Financial performance
• Products and services
• Social responsibility
• Vision and leadership
• Workplace environment

Wal-Mart didn't score in the top five for any of those categories. And this is the world's largest company by revenues where its customers have made it what it is by consistently growing their shopping at the retailer's stores. How can it be? Wal-Mart was ranked #40 in 2006, and slid to #44 in 2007. Last year alone, the retailer saw many pings against it, from a large female employee discrimination suit to outcries of executive compensation to no movement at all in its stock price for its shareholders. 2008 has been a different story from a financial perspective, however.

Most Americans surveyed for this report has a pessimistic view of large corporations in general. Stating that the general corporation reputation is "not good or terrible," the views of the average American consumer are at full play here. From the financial credit market collapse to the housing market scandals to the energy costs that have made gas prices higher than in a generation, the consumer is feeling pummeled. Add that to the ludicrous amount of corporate leadership making millions of dollars during all this while the consumer constantly gets stiffed and it's easy to see why they're quite displeased. But all in all, Wal-Mart was geared to help this exact customer contingent by actually controlling inflation in every way it could for them. Yet, the retailer's reputation didn't grow at all -- but slipped last year.

Why Wal-Mart gets a black eye every time it turns around

The Harris Interactive report states that there is a direct relationship with a company's public reputation and the likelihood of purchasing or recommending a company's products or service. In other words, we can infer that Wal-Mart may have had an even better 2007 (which did see profits and decent performance) if its public reputation had been better managed.

I've said this before: Wal-Mart is in dire need of an army to manage its reputation all the time. A few well-placed PR stunts won't cut it. If Wal-Mart is indeed becoming the "greenest retailer" on the planet and is helping environmental sustainability, let the world and all customers constantly know -- for months on end until it's drilled into everyone's head. That's just an example. Surely Wal-Mart has contracted to some form to manage its global reputation, segmented down into individual markets by the customer base inside those markets. If not, well, Wal-Mart's position as #44 in 2007 is reflective of its non-effort here.

But then again, 18% of those contacted for the study said they would "recommend" Wal-Mart's stock as in investment for the future. Fickle are those customers, yes? They seem to not have the highest opinion about the retailer, yet almost one-fifth of them would recommend the company's shares as a future investment. In addition, Wal-Mart came in at #1 on the report in terms of customers being "very familiar with the company." There is a Wal-Mart in almost every corner of America and it's the nation's largest retailer and company -- everyone should be intimately familiar with the retailer if nothing else.

But then again -- almost everyone contacted was "very familiar" with Wal-Mart, but gave it poor marks for having a shiny reputation. There's the disconnect. In terms of "public sincerity" Wal-Mart ranked #47 on the list. So, while customers know all about Wal-Mart and continue shopping in droves at its locations, the amount of trust consumers have about the retailer is not that stellar at all. Interesting food for thought here.

Join me back here this time next week for another edition of The Wal-Mart Weekly. Until then, have a great week!

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Bed Bath & Beyond (NASDAQ: BBBY) reported Q1 earnings on Wednesday, and Trey Thoelcke highlighted the numbers in this earnings-recap piece. Shares rose substantially in the after-hours trading session yesterday, jumping over 8%, and as I reviewed various earnings reports last night, I found myself drawn to the retailer's stock performance. I haven't been a huge fan of Bed Bath & Beyond as of late, so I figured I should take a look at the earnings release to see if there's anything here that would change my opinion.

Unfortunately, there isn't. Sales may have grown 6%, and expectations may have been beaten by $0.03, but net income still dropped over 20% to $0.30 per diluted share. Cash flow from operations declined 44% to $65.8 million. And same-store sales were very anemic, rising only 0.8%.

I choose, in this case, to focus on those figures. I also consider the fact that Bed Bath & Beyond does not pay a dividend, and that we are in an awful economic environment, both from a consumer and stock-market standpoint. This is not the stock I'd want to face the recession with, and I don't necessarily find it to be a big value right now. When it comes to retail, I am more likely to look at Wal-Mart (NYSE: WMT) and Target (NYSE: TGT). I'd even consider a Home Depot (NYSE: HD) or a Lowe's (NYSE: LOW). All of these stocks pay dividends and have better brand equities and more attractive prospects. Bed Bath & Beyond certainly didn't deliver an earnings bomb, but I'm still not inclined to put money here.

Disclosure: I don't own any company mentioned; positions can change at any time.

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This is the part of a new series of columns called "The Naked Truth," by retirement expert Dan Solin. Please bring him your questions, in the comments box, and he will answer as many as he can.

Wal-Mart (NYSE: WMT) is the world's largest company with over $380 billion in revenues. It's success is based on it ability to squeeze vendors to the breaking point. The largest manufacturers are no match for this retail giant.

Wal-Mart's 401(k) plan has over $9.5 billion in assets. Its modestly paid employees count on this plan to fund their retirement.

A recent class action lawsuit makes allegations which, if true, will cause many of these employees to be great disappointed.

The suit alleges that Wal-Mart's 401(k) plan pays "retail" for its mutual funds, instead of the institutional rate for the same funds. Institutional funds require a minimum investment ranging from $100,000 up to $1 million. Clearly, not a big hurdle for Wal-Mart's mega 401(k) plan.

The difference in cost between retail and institutional funds is significant. The average annual expense ratio for retail equity mutual funds is around 1.50%. The same expense ratio for an institutional fund is around 0.50%.

A 1% difference in costs doesn't seem like much but it can add up. On an initial investment of $50,000, it could cost investors as much as $19,000 over 20 years, assuming an 8% rate of return.

The failure to insist on lower cost institutional funds is not the only problem with Wal-Mart's 401(k) plan. It is populated with high expense ratio, actively managed funds, despite the fact that lower cost, actively manged funds, with similar benchmarks and better performance, are available from fund families like Vanguard.

Yet even these obvious deficiencies still don't address the primary problem with the plan. Why are actively managed funds included at all? The plan should consist solely of low-cost, broadly diversified, domestic and international stock and bond index funds, and target retirement funds, made up of low-cost index funds. The complaint alleges that, if Wal-Mart had followed this practice, the plan would have increased in value by an additional $140 million for the six-year period ending January 31, 2007.

Has Wal-Mart lost its negotiating mojo? Or has it succumbed to a flawed 401(k) system that places the interests of employers, brokers, consultants and the mutual fund industry above those of its employees?

Dan Solin is the author of The Smartest Investment Book You'll Ever Read (Perigee Books 2006) and The Smartest 401(k) Book You'll Ever Read (Perigee Books, June 24, 2008). Visit his website at Smartestinvestmentbook.com.

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Wal-Mart Stores (NYSE: WMT) is the world's largest retailer, offering a vast array of general merchandise through some 7,350 stores. That total includes nearly 1,000 discount stores, over 2,800 combination discount and grocery stores and about 600 warehouse outlets. More than half of Wal-Mart's facilities are in the United States, but the firm has a widespread and growing international presence. It is the biggest retailer in Canada and Mexico, has a 95% stake in Japan's Seiyu and has developing operations in Europe, South America and Asia. The company employs more than two million associates and serves more than 200 million customers per year. Costco Wholesale (NASDAQ: COST) and Target Corporation (NYSE: TGT) are competitors.

The stock has been a steady Q2 gainer, advancing on word of solid Q1 results, better than expected same-store sales figures, an expanding discount drug program, international development, and favorable analyst commentary.

The news has kept WMT shares cycling through a positive three-month trading channel. The price is currently consolidating at the base of that channel, where oversold CCI, MACD and Stochastic technical parameters suggest the potential for a rise back toward the top.

Brokers recommend the issue with eight "strong buys", eleven "buys", five "holds" and one "underperform". Analysts expect a 12% average annual growth rate, through the next five years. The WMT P/E ratio (17.77), Price to Sales ratio (0.59), Return on Assets (8.37%), Return on Investment (13.31%) and Return on Equity (21.24%) compare favorably with industry, sector and S&P 500 averages. Institutions hold about 40% of the outstanding shares. The stock is one of those used to calculate the Dow Jones Industrial Average, the Dow Jones Composite, the S&P 500 Index and the S&P 100 Index. Over the past 52 weeks, it has traded between $42.09 and $59.95. A stop-loss of $49.75 looks good here. Note that the firm is expected to report fiscal Q2 results in mid-August.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold positions in any of the stocks mentioned above.

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Walgreen (NYSE: WAG) reported sluggish Q3 numbers last week. Net sales increased a little under 10% to $15 billion. Net income increased a whopping two pennies to 58 cents per diluted share (the term "whopping" is used here sarcastically). According to this article, Walgreen met top-line expectations but missed the bottom-line call by a penny.

Gross margin remained relatively stable, but the net margin dropped to 3.8% in the quarter compared to 4.1% in the previous year's similar period. But same-store sales increased 3.4%, which is a decent number. Also, operational cash flow jumped over 19% to $2.5 billion. That's excellent; it's always good to see cash coming in. It helps mitigate the tepid earnings expansion. Walgreen did well with its cash-flow statement last time around as well. Walgreen management cited the economy as a factor in its earnings stats and highlighted the fact that it cut back on expenses, including advertising. Making sure costs don't get out of hand is important, but I'd be careful about eliminating too much of the advertising budget. Competing with CVS Caremark (NYSE: CVS), Rite-Aid (NYSE: RAD), and the pharmacy at Wal-Mart (NYSE: WMT) obligates brand-building and differentiation.

Walgreen's Q3 wasn't beyond awesome, but it was solid enough. The stock is only down slightly as I write this. As a long-term play on the need for drugstores, it's not a bad way to go.

Disclosure: I don't own any company mentioned; positions can change at any time.

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This post is part of our Big Company, Small Town series, featuring large companies and the small towns in which they are headquartered.

You probably wouldn't think that the world's largest public corporation is located in a small town with a population of just 29,538 (based on the 2005 Census), but Wal-Mart Stores Inc. (NYSE: WMT) maintains its corporate headquarters in such a town -- Bentonville, Arkansas. Sam Walton opened his first store there in the mid-1940s -- Walton's Five and Dime -- on Main Street as a Ben Franklin franchise. Today that store is Wal-Mart's visitors' center where you can find thousands of company photographs and memorabilia.

Sam Walton's first Wal-Mart Discount City store opened in 1962 in Rogers, Arkansas, and within five years Walton had 24 stores in various towns in Arkansas. In 1968 he opened his first stores outside Arkansas, in Missouri and Oklahoma. Walton incorporated Wal-Mart Stores in 1969 and started selling shares over-the-counter in 1970. The company was first listed on the New York Stock Exchange in 1972. Today Wal-Mart has more than 6,700 stores worldwide and serves more than 176 million customers weekly.

Wal-Mart is not known for helping small towns. In fact when Wal-Mart arrives in a small town, many existing mom-and-pop stores go out of business in 6 to 12 months. Numerous studies have been done regarding this phenomena and the general conclusion is that store owners who learn to adapt to the changes in the retail market for the community can survive after Wal-Mart arrives. They can't compete head-on though. They must focus on customer service and other services that their customers won't find at the local Wal-Mart.

Wal-Mart also isn't known for its generosity. It does give away about 2% of its $12.7 billion net profit ,or $29.6 million, but Wal-Mart is often criticized for not giving more to the communities it serves. In Bentonville, the biggest recipient is the Bentonville Library Foundation, to which Wal-Mart has given more than $1 million. Other local recipients include the Bentonville Bella Vista Trailblazers Association, the Rogers Little Theater, Walton Arts Center, and the Helen Walton Child Development Center.

Lita Epstein has written more than 20 books, including Trading for Dummies and Reading Financial Reports for Dummies.

Be sure to check out more Big Company, Small Town posts.

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Welcome to the 65th installment of The Wal-Mart Weekly, a column dedicated to bringing you insight, wit, facts, results, opinions, and just a bit of everything else when it comes to a very hot topic these days: Wal-Mart.

This week, I'll be taking a look at product quality in relation to Wal-Mart Stores Inc. (NYSE: WMT. As you may have read by now, Adidas AG, the second-largest maker of sporting goods globally, has said that a house brand of shoes sold at Wal-Mart may injure those that wear them. Now that's quite a statement about product quality, yes?

Adidas specifically said that Wal-Mart's Athletic Works shoes should not be worn or used by runners, as they may cause injury. I've never heard of a shoe or sporting goods manufacturer state that a particular type of show would injure a runner, but there you have it. These Athletic Works shows are "not suitable to run in," according to Adidas. How was this claim determined -- and what about other Wal-Mart products that may have inferior quality? Read on.

Quality is job #2

Unlike Ford Motor Co. (NYSE: F), where "Quality is job #1," quality apparently is not even near the top when it comes to Wal- Mart's Athletic Works brand of shoes. The reason for the potential of these shoes to injure runners, according to Adidas, is that Wal-Mart house brand shoes in question are made with substandard materials.

With Athletic Works shoes being made in China, this should not come as a surprise. But then again, almost all major shoe brands have product lines made in China (including much of Nike's lines), and product quality is not a problem with major brands. Why Wal-Mart's brand?

The quality in question was found inferior by Adidas using two simulated running tests. In fact, there was not a human involved at all. What was the purpose of Adidas running simulated running tests on a competitor's shoes? Just so it could claim that they are unfit for use? Interesting angle here, Adidas.

Since claims that border on false are the backbone of the entire advertising industry, it should come as no surprise that there are products in a retail store like Wal-Mart that could never perform as advertised. However, when it comes to possible human injury -- much like children's toys that have been recalled in recent years -- the situation becomes just a little more important.

Bring it! That is, a false advertising suit

A quality assurance manager for Adidas said that the Athletic Works shoes "could potentially injure short- and long-distance runners ... they are, quite simply, not suitable to run in." That's a pretty powerful claim itself. At issues is Wal-Mart's use of joggers on the boxes for these running shoe products and the use of the word "performance" to describe what these shoes are made for. Put those images and words together and there is easily an implication of "running performance" to the potential buyer.

In Adidas's tests, one pair of these shoes was damaged after a complete 120-mile simulated run, while the other pair fell apart after 97 miles. By contrast, a pair of Adidas shoes must past the same 120-mile simulated test without significant wear. Wal-Mart has already asked the court to dismiss the claim, and the retailer has a point: it does imply running performance with its Athletic Works shoes, but does not guarantee 120-mile performance. So, what gives, Adidas? Are you saying that Wal-Mart's brand must perform up to your standards? The old adage holds true here: you get what you pay for. I'm quite sure that a pair of Athletic Works shoes don't cost near the same that a pair of Adidas shoes cost.

But then again, if a purchaser of Athletic Works shoes has a reasonable implication that the purchase can be used for jogging or running, and potential injury may occur because of substandard materials, that is significant. But then again, I don't believe Wal-Mart gave a claim of "120 miles" on its packaging, either. Wal-Mart responded to Adidas's claim of false advertising by stating that "Adidas is unable to put forth any evidence to show that Wal-Mart's use of the words 'running' and 'performance' and the image of a jogger on limited product packaging for athletic footwear is false."

Adidas filed a claim that Wal-Mart "maliciously" sold hundreds of thousands of these shoes. Adidas goes on to claim that these were "imitation Adidas shoes," and that Wal-Mart violated a 2002 settlement that prohibited its marketing of "confusingly similar" products. So, what is at stake here is Wal-Mart's potential to confuse customers with "Adidas" and "Athletic Works" shoes, where one pair falls apart after a short time with the potential to injury the wearer and the other does not. Adidas apparently believes that the trademarked Adidas stripe, which is replicated to a good degree on Athletic Works shoes, may confuse customers.

Unless that customer can't read English, I find this claim quite ludicrous. For one, Adidas is slapping the Wal-Mart customer in the face by calling them stupid with this statement. Although Wal-Mart's core customer target group, the lower to mid-lower class, isn't generally given credit for being intellectually gifted, it's amazing that a company the size of Adidas thinks a "stripe on a shoe" can confuse customers. I've seen plenty of semi-swooshes on generic shoes -- does this make them Nike knock-offs? Hardly.

Does the quest for quantity bring down quality?

Wal-Mart Watch has a response to this situation that brings up the hard fact about product quality in Wal-Mart's inventory of non-food goods these days. Regardless of the retailer's stance on its shoes, is product quality inferior on most Wal-Mart goods? In general, I completely agree with one statement here: the pursuit of lower costs almost invariably leads to inferior quality. Is Wal-Mart creating a market of throwaway products in all product categories simply because the quality is so bad? We all know most of us treat all items we use everyday with the utmost care, right?

Wrong -- we use our products hard. What's the expectation to fail? When we've just worn the product out visibly, or within a few months. Is Wal-Mart lowering the quality expectation we have on almost every good we can think of? Hardly -- all those brands that fill up Wal-Mart's store shelves aren't Wal-Mart's products at all. However, major manufacturers may give a lower quality product -- in the same package -- to Wal-Mart due to the retailer's pricing demands. So, we are back to square one -- quantity triumphs over quality. It's now the norm of the day for this sentiment to be true in retail. Sell, sell, sell!

Join me right here this time next week for another edition of The Wal-Mart Weekly. Until then, have a great week!

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Ted Allrich is the founder of The Online Investor and author of the just released book: Comfort Zone Investing: Build Wealth And Sleep Well At Night. In this weekly column, he'll offer advice to investors who are just getting started.

Last week I wrote about what might happen if gas continues its seemingly inevitable march upward, maybe reaching $10 a gallon. There will be changes in our lifestyles, major changes. Some companies will benefit greatly, others will simply go away, unable to evolve with the new reality. Here are more industries that will be affected.

The airlines, at least the ones left, will fly smaller planes, more fuel efficient. They'll be full, every one, every time. They may not take off unless they are. Some cancelled if they're not booked up 12 hours in advance. Expect more hassles at the airport, more charges and fees for whatever airlines can imagine. (How about charging by the pound? Passengers get on a scale, then pay at the counter based on their weight.) Seat space will get even smaller.

Look for more consolidation in the airlines as costs have to go down to run effectively. Don't expect profits from the industry until after the mergers and acquisitions finish. Post-merger or acquisition airlines will have fewer administrative personnel, fewer stewardesses and stewards on board each flight. Check in will be all by computer.

Package delivery services and the Post Office will raise rates. At some point if these get too high, customers won't order through the mail or online, preferring to buy locally because it's cheaper. The solution: Delivery trucks will have to run on electricity or hydrogen or other efficient fuels but not ethanol or other grain-based liquid. Delivery services not making the transition won't make it, period.

Bicycle sales will rise as will scooters and other gas-sipping modes of transportation. It's already difficult to buy a Vespa as people discover they're easy to ride, fun and very efficient. The Segway will get much more attention. Look for other, new people-movers, especially ones that run on electricity. Watch sales of Tesla, the all electric car manufacturer, skyrocket. General Motors Corp. (NYSE: GM) introduces the Volt (all electric) in 2010. Ford (NYSE: F) will have an electric, too. All car companies will. They have to. A better fuel for cars is hydrogen. Honda just introduced the FCX Clarity (at least 5 of them anyway) that uses hydrogen. It's thinking: introduce the car and the hydrogen stations will follow. BMW, Ford and Toyota also have working hydrogen models.

Shoe sales will ramp, especially in the walking category. As workers move into cities to be closer to their jobs, they'll want comfortable shoes to get to and from work. Merrell already is doing well with its no-nonsense, all-day comfort designs. Other shoemakers will be offering new models to fill demand.

The Internet will play more of a role in everything from ordering groceries to a college education. Anything that saves people from using private transportation will prosper. The Web will be more disruptive to established businesses as it continues to save time, money and gas for the user. Winners: educational sites, local grocery sites, book sites such as Amazon, apparel sites.

One-stop-shopping will increase. Wal-Mart Stores (NYSE: WMT) is leading the way with its super stores carrying everything from wrenches to Cheetos. If you have to go out and don't want to drive far or stop in many places, the big stores offering almost every product is where you head. The more convenience a store can offer, the better it will do. Costco, Target have a wide variety of goods now. Expect more. Other stores will follow.

Roads will be less crowded. If not from fewer cars, then from smaller cars.

Remember these are thoughts for a world when gas is $10 a gallon (it's over $8 in parts of Europe now). And they reflect experience to date. You can be sure very smart people are devising better cars, better planes, better ways of moving people. We'll see many new and great (some not so great) products come from this latest crisis. Even if gas never reaches $10, some of them will get to market. People will change behaviors.

As they shift into alternative energy sources, the price of gas will probably not go too much lower since Brazil, China and India are quick to buy any oil. But if all countries embrace the new technology (think of how China is much more of a wireless communications country....it simply skipped the whole land line technology), gas may come down drastically. That will only happen if all countries make alternative fuels a priority. So far, that hasn't been shown.

As always, investors need to think about the future, about what might happen, and make adjustments. Right now it's hard to believe that some industries will be here in a decade, especially the ones that depend on gas for profits.

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hhgregg (NYSE: HGG) is a specialty retailer of consumer electronics, home appliances and related services. The firm operates 97 southeastern and midwestern U.S. stores, under the names hhgregg and Fine Lines. It also operates a retail Web site. Offerings include notebook computers, televisions, DVD recorders, refrigerators, ranges, dishwashers, freezers, washers, dryers and Serta mattresses. Competitors include Best Buy (NYSE: BBY), Circuit City Stores (NYSE: CC) and Wal-Mart (NYSE: WMT).

The company pleased investors earlier in the month, when it reported solid Q4 results and offered FY09 EPS guidance in-line with the consensus Street view. Management attributed success to increased sales of higher-priced video and major appliance products. Plans call for opening 15 to 17 stores, during the new fiscal year.

HGG shares popped on the news and then moved into a bullish "pennant" consolidation pattern. Prices frequently exit pennants moving in the same direction they were traveling on entry. In this case, that would be to the upside.

Brokers recommend the issue with three "strong buys", four "buys" and two "holds". Analysts see a 20% average annual growth rate, through the next five years. The HGG Price to Sales ratio (0.32), Price to Cash Flow ratio (11.97), Sales Growth rate (14.41%), Return on Investment (11.96%) and Return on Equity (43.70%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 45% of the outstanding shares. Since going public last July, the stock has traded between $7.76 and $17.22. A stop-loss of $10.65 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold positions in any of the stocks mentioned above.

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