Walmart shares have recently experienced a tumultuous ride in the stock market. The retail giant's stock hit record highs earlier this year but faced its worst daily performance since November 2023 on the day it reported its fiscal fourth-quarter results. The stock price plummeted more than 6% on that day alone, marking a significant decline. Despite this setback, Walmart's stock remains up about 64% over the past 52 weeks. Former Walmart U.S. CEO, Bill Simon, sees this sell-off as a major opportunity for investors.
On February 14, Walmart's stock reached its all-time high. However, since then, the stock has fallen by 10%. Adding to the volatility, Walmart shares experienced their worst weekly performance since May 2022, tumbling almost 9%. Simon attributes the recent sell-off to concerns over slowing profit growth forecasts and fears of U.S. tariffs against Canada and Mexico. Nevertheless, he predicts that these tariffs will not adversely affect Walmart.
"I absolutely thought their guidance was pretty strong given the fact that… nobody knows what's going to happen with tariffs," – Bill Simon
Simon appeared on CNBC's "Fast Money" to discuss Walmart's fiscal fourth-quarter results and shared his optimistic outlook for the company. He believes that higher-income consumers may now shop at Walmart permanently, which could bolster the retailer's customer base. Additionally, Simon noted that the economic and geopolitical backdrop is unprecedented, yet he remains confident in Walmart's ability to navigate these challenges.
"I thought if you hit your numbers and did well and beat your earnings, things would usually go well for you in the market. But little do we know. You got to have some magic dust," – Bill Simon
Simon further expressed his view that Walmart is a nimble retailer capable of adapting to changing market dynamics. He also mentioned his previous warning on "Fast Money" last May about affluent consumers creating a "bubble" at Walmart, which seems to be materializing now.
"If you liked that story yesterday before the earnings release, you should love it today because it's… cheaper," – Bill Simon
As Simon currently serves on the Darden Restaurants board and as chairman at Hanesbrands, his insights carry weight in the investment community. His perspective suggests that the current dip in Walmart's stock price might present a valuable entry point for investors willing to look beyond short-term market fluctuations.
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