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Six retailers that could outperform Walmart

Leaked emails from Walmart (WMT) executives caused a number of retail stocks to drop sharply last week.

Jerry Murray referred to the company's February sales up to that point as a “total disaster.” The market reacted quickly as the sentiment confirmed fears that low-end consumers would be particularly hard by the two-percent payroll tax increase that took effect at the beginning of the year.

Thursday though, Walmart CEO Bill Simon blamed the slow start to February on a delay in income-tax return checks and said sales have started to pick up over the past week, “resulting in a more normalized weekly sales pattern for this time of the year.”

The company left the door open to casting blame for weak sales going forward on the payroll-tax increase, but for now it seems like the doomsday scenario that appeared to be coming true a week earlier was only a mirage.

Walmart is the nation's largest retailer, and as such its results can tell us a lot about the health of the economy. On the other hand, Walmart relies heavily on down-market consumers. These shoppers have less disposable income and as such to be more sensitive things like the payroll-tax increase or rising gas prices. This mean Walmart may be more sensitive to some events than other retailers.

Chart courtesy of stockcharts.com.

I've compiled a list of retailers that I think could outperform Walmart in the current environment.

Bobby Raines

Bobby Raines is the Managing Editor of the Market Intelligence Center. He has degrees in Mass Communications and History from Emory & Henry College. Bobby worked at a mid-sized daily newspaper before making a switch to covering the financial industry full time in the years leading up to the financial crisis. He has been a member of the Fresh Brewed Media team since 2011 and has served as a writer and analyst. You can write to him at braines@marketintelligencecenter.com or follow him on Twitter: @BRatMICenter.