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Walmart’s Strength Outweighs Tariff Worries, Says Former CEO

Despite Walmart’s cautious tone about potential tariff impacts, former U.S. CEO Bill Simon believes the retail giant is well-equipped to absorb additional costs without significantly raising prices. Simon, who led Walmart U.S. from 2010 to 2014, expressed his views during an interview on CNBC’s “Fast Money” following Walmart’s latest fiscal results.

Financial Resilience: Margin Growth and Profit Stability

Simon pointed out that Walmart’s financial performance indicates strength rather than vulnerability. The company’s U.S. gross profit margin increased by 25 basis points in the most recent quarter, even as its general merchandise categories remained relatively flat, with mid-single-digit price deflation.

“If you dig into the details of their earnings release today, they grew their gross profit margin, which shows they are effectively managing costs. This, in my view, gives them the flexibility to handle any tariff impact,” Simon explained.

This positive margin growth reflects Walmart’s strategic cost management, allowing the company to maintain profitability even in a challenging economic climate.

Consumer Confidence: Market Conditions Remain Favorable

Simon remains optimistic about the broader economic landscape, emphasizing that consumer sentiment is still buoyant due to a steady job market and lower fuel prices. He believes that consumers can generally withstand modest price increases, contrary to some of the cautious messaging from Walmart executives.

“All the doom and gloom about tariffs from my friends at Walmart today, I think it scares consumers unnecessarily,” Simon noted, expressing his belief that negative corporate rhetoric could undermine consumer confidence.

As a board member of Darden Restaurants and chairman of Hanesbrands, Simon’s perspective reflects his broader experience in the retail and consumer goods sectors.

Stock Performance: Market Reaction and Future Outlook

Following Walmart’s fiscal update, the company’s shares dipped 0.5% on Thursday, though they remained above session lows. Notably, Walmart’s stock has increased more than 6% in 2025, showcasing the market’s continued confidence.

Simon suggested that Walmart shares remain an attractive opportunity for investors, particularly given the recent pullback from the all-time high of $105.30 reached on February 14. He noted that shares have climbed over 7% since President Donald Trump’s tariff announcement on April 2, reflecting resilience amid market jitters.

During a previous appearance on CNBC’s “Fast Money” in February, Simon encouraged investors to view Walmart’s stock as a bargain, despite the retailer’s warnings of slower profit growth.

Broader Retail Landscape: Navigating Tariff Challenges

Retailers across the board are grappling with the potential impact of tariffs on consumer goods, especially as geopolitical uncertainties loom. However, Simon’s confidence in Walmart’s ability to navigate these challenges underscores the company’s robust operational strategies.

Walmart has been proactive in managing supply chain costs and has demonstrated consistent financial discipline, which Simon believes will cushion the impact of any future tariff increases.

While some analysts remain cautious, pointing to ongoing trade negotiations and unpredictable policy shifts, Walmart’s recent performance indicates that the retailer’s long-term strategy remains sound.

Confidence Amid Uncertainty

Bill Simon’s remarks serve as a reminder that while tariffs pose potential challenges, Walmart’s financial resilience and strategic cost management put it in a strong position to weather the storm. As consumer confidence remains relatively stable, the retailer’s proactive approach to managing costs and maintaining profitability could continue to support its market standing.

In an industry where sentiment can heavily influence market performance, Simon’s pragmatic perspective offers a counterpoint to the more cautious narrative presented by Walmart’s current leadership. For investors and market watchers, this signals that Walmart may be better positioned than some fear.

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