Wal-Mart Softens June Sales Forecast; Defends 'Happy Face'

BENTONVILLE, Ark. -- In its weekend sales update, Wal-Mart Stores, Inc. forecast that same-store sales in June would rise 1.2 percent, at the low end of its original prediction of a 1 percent to 3 percent gain from June 2005.

Analysts cited wet weather, store remodeling, and high gas prices as reasons for the change. "Pressure on the discretionary spending power of low-income shoppers has constrained sales growth," Oppenheimer & Co. analyst Bernard Sosnick wrote in a note to clients.

Sosnick predicted that Wal-Mart management will take the necessary measures to catch up and will ""demonstrate price leadership forcefully in July and August." He said Wal-Mart will begin its back-to-school campaign early, with price rollbacks starting July 9.

In other Wal-Mart news, the retailer's well-known trademark, the yellow happy face, is at the center of a legal battle between Wal-Mart and London-based SmileyWorld, according to published reports.

SmileyWorld first registered rights to the symbol with the French trademark authorities in October 1971. In 1997 it filed for a U.S. trademark for the exclusive right to commercial use and licensing of the term "smiley" in conjunction with the face logo, the International Herald Tribune reported.

Trademark rules differ in the U.S. compared to most countries in Europe and Asia, however. In the U.S., it's not as important if you're the first to register a trademark –- rights to a trademark are base more on how heavily the trademark is used.

Wal-Mart filed a notice of opposition to SmileyWorld's trademark application and then filed a separate application to trademark the smiley, the newspaper said.

In response, SmileyWorld filed a notice of opposition to Wal-Mart's application on the grounds that its own attempt to trademark the face had been rejected.

Both parties have said they expect to emerge victorious when the United States Patent and Trademark Office rules on the case this summer.

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