We may steal Walmart stock.
Former Walmart US CEO Bill Simon argues that slow profit growth forecasts and sales of retailer stocks related to tariff horrors create great opportunities for investors.
“I thought their guidance was pretty strong given the fact that no one knows what will happen with the tariffs,” he told CNBC’s “Fast Money” on Thursday. Walmart reported its fourth quarter results.
But even if the US moves forward with tariffs on Canada and Mexico, Simon predicts that “nothing” should happen to Walmart.
“In the end, consumers decide whether there is a tariff or not,” Simon said. “There are tariffs on avocados in Mexico. Do you have guacamole on the tip, or salsa and queso that don’t have customs duties?”
Additionally, Simon, currently on the board at Darden Restaurant and chairman of the Haynes Brand, considers Walmart as an agile retailer.
“Big Guy, Walmart, Costco, Target, Amazon…has supply and procurement capabilities to ease tariffs by redirecting products. [and] Simon said. “They’ll understand tariffs,” Simon said.
Walmart stocks have seen their worst performance each week since May 2022. The stock price fell by more than 6% on earnings days alone. It was the worst everyday performance of stocks since November 2023.
Simon thinks the sale is odd.
“I thought that if you bump into your numbers and get along well and beat your income, things will work for you and for you. But we hardly know Mmm. You had to have some magical dust,” he said. “I don’t know how we did it a lot better this quarter.”
When he warned that wealthy consumers were creating a “bubble” at Walmart, that’s a departure from his stance on “Fast Money” last May. Walmart stocks have hit record highs. He noted that historical trends pointed to a final shift from convenience and price to service.
But now, Simon believes that high-income consumers may shop forever at Walmart, with their economic and geopolitical backgrounds being very unprecedented.
“If you like that story before the revenues were released yesterday, it’s… cheap so you should love it today,” Simon said.
Walmart stocks are down 10% from their all-time hit on February 14th. However, it has increased by around 64% over the past 52 weeks.
Sign up for Spotlight Newsletter, a hand-curated collection of video clips selected by CNBC’s top editors and producers. A daily summary of top business highlights and key stories.
Disclaimer
