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A Surprising Stock Market Reaction

Walmart’s stock tumbled 4.5% on Thursday, making it the Dow’s biggest loser of the day, despite the retailer raising its full-year sales and earnings outlook. For Bill Simon, Walmart’s former U.S. CEO who led the business from 2010 to 2014, the market reaction simply doesn’t add up.

“It was about as good of a quarter as any retailer could have in any environment,” Simon said in an interview on CNBC’s Fast Money. “I don’t get the decline in the market today at all.”

Walmart’s Performance and Guidance

The retail giant impressed Wall Street by increasing guidance even amid persistent tariff pressures, showcasing its ability to absorb costs while maintaining attractive pricing for shoppers. According to Simon, this highlights Walmart’s competitive edge:

• Topline growth remains strong.
• Margins are expanding.
• Guidance has been raised despite economic headwinds.

“If you liked them yesterday, I don’t know why you don’t love them today,” Simon said. “They’re really hitting it on all cylinders.”

Why Investors May Be Concerned

Some analysts believe Thursday’s selloff stemmed from Walmart’s first earnings miss in more than three years. The shortfall, however, was largely tied to one-off costs, including restructuring expenses and insurance claims — not underlying business weakness.

“It’s a big number, but it’s a one-time adjustment,” Simon emphasized. “It’s not a systemic issue.”

Shifts in Consumer Behavior

Simon, who now serves on the Darden Restaurants board and as Hanesbrands chairman, has at times been cautious on Walmart’s positioning. Last year, he suggested that high-income shoppers were temporarily fueling Walmart’s growth during inflationary pressures, warning they could eventually return to premium retailers.

But consumer behavior hasn’t shifted as quickly as he anticipated. Walmart’s blend of low prices, grocery convenience, and broad product offerings continues to attract both budget-conscious and higher-income households.

“If they can keep those toplines going, and that’s their forecast, they’re going to be just a bear of a company,” Simon said.

Stock Performance This Year

So far in 2025, Walmart shares are up 8% year-to-date, underscoring investor confidence in its long-term strength. However, the stock is still trading about 7% below its all-time high from February 14, showing that investors remain cautious despite robust fundamentals.

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