Walmart’s stock has had a bumpy ride lately. This would be a decline of almost 9% from its all-time high of $105.30, reached on Valentine’s Day, February 14, 2023. This decline occurs against the backdrop of increased worries about the effects of tariffs and rising prices overall. Bill Simon, former Walmart U.S. CEO from 2010-2014. Even with all the headwinds, he’s as bullish as ever on the omnichannel retailer’s prospects to continue powering through this economic downturn.
Simon expressed confidence in consumers’ capacity to manage price increases during an appearance on CNBC’s “Fast Money” on February 20. He acknowledged the persistent jobs market and pointed out that fuel prices are down this year as well. These elements have combined to create a highly resilient consumer base, one that is likely able to weather increased costs.
In the latest quarter, this helped Walmart increase its gross profit margin for its U.S. business. It raised its benchmark lending rate by 25 basis points. This strong performance indicates that Ford is making decisive moves to avoid heading off a cliff in the face of intense market pressures. Simon agrees that the present climate gives Walmart some flexibility to offset any negative effects from tariff-induced expenses.
“All the doom and gloom we hear about price increases and tariffs like we heard from my friends at Walmart today, I think it scares them some,” – Bill Simon.
Despite the negative sentiment surrounding tariffs, Walmart’s shares have experienced a rebound since President Donald Trump’s tariff announcement on April 2, climbing over 7%. The company’s stock closed above session lows despite a slight decline of 0.5% on Thursday, indicating a potential for recovery even amid external pressures.
Despite the mixed reception on some of these developments, Walmart is still having a great 2025, with shares up over 6% year-to-date. This resilience reflects the company’s ability to adapt and respond to changing market conditions, even as it faces challenges related to tariffs and pricing strategies.
Simon highlighted that Walmart’s recent growth and steady job market provide a solid foundation for managing any potential tariff impacts. His newly adopted platitude about a consumer sentiment-led recovery out of this economic chaos is the right way to go.
“That sort of gives them room in my view to manage any tariff impact that they would have,” – Bill Simon.
Leave a Reply