Walmart's upside is still very significant, says former Walmart U.S. CEO Bill Simon
December 24, 2025 • 4m 34s
? (Reporter)
00:00.270
let's
bring
in
bill
simon
former
CEO
of
walmart
US
and
michael
baker
da
davidson
retail
analyst
gentlemen
good
to
see
you
bill
i'll
start
off
with
you
? (Reporter)
00:08.670
and
and
obviously
i
i
know
that
you've
been
in
favor
of
walmart
obviously
for
a
long
time
but
i
mean
at
this
point
you
know
it's
it's
hands
down
the
favorite
i
think
across
retail
analysts
amongst
investors
as
well
it
it
has
a
premium
valuation
at
what
point
do
you
say
? (Reporter)
00:23.790
everything
's
been
factored
in
it
is
getting
too
expensive
relative
not
only
to
his
peers
but
to
itself
hey
Bill Simon (Former CEO)
00:30.660
good
morning
you
know
walmart
's
a
machine
and
it
has
been
for
a
number
of
years
you
know
they've
got
some
tailwinds
and
some
headwinds
coming
up
into
twenty
twenty
six
you
know
they're
going
to
do
it
CEO
transition
that's
always
difficult
that'll
be
a
difficult
headwind
Bill Simon (Former CEO)
00:44.020
although
john
furniture
is
a
very
capable
guy
Bill Simon (Former CEO)
00:46.580
their
upside
is
still
to
me
very
you
know
very
significant
as
as
they
start
incorporating
more
AI
function
into
their
functional
processes
what
is
an
efficient
machine
will
become
even
more
efficient
so
i
think
there's
some
upside
in
walmart
they're
valued
a
little
bit
more
like
Bill Simon (Former CEO)
01:07.070
a
tech
stock
than
a
than
a
brick
and
mortar
retailer
right
now
so
i
think
that
might
be
a
little
bit
of
a
tailwind
but
i'm
still
pretty
bullish
on
them
? (Reporter)
01:14.230
they're
valued
like
more
expensive
than
alphabet
i
mean
four
P
is
forty
two
compared
to
an
alphabet
which
is
about
thirty
i
mean
michael
you've
got
a
one
hundred
and
thirty
dollar
price
target
on
on
walmart
specifically
a
buy
rating
how
do
you
see
walmarts
valuation
relative
to
? (Reporter)
01:28.550
a
target
which
also
is
going
to
be
undergoing
a
CEO
transformation
but
a
CEO
who
is
really
committed
to
this
transformation
in
a
recent
article
he
was
talking
about
even
just
small
gains
in
market
share
that
there's
no
category
where
they
have
more
than
three
percent
share
which
? (Reporter)
01:41.590
is
just
astonishing
and
so
if
they're
able
to
move
the
needle
just
a
little
bit
that
could
mean
a
lot
to
the
bottom
line
Michael Baker (Senior Research Analyst)
01:47.670
right
very
different
stories
of
course
it's
a
very
different
valuation
parameters
we
think
of
walmart
still
cheaper
by
the
way
than
costco
so
sure
it's
an
expensive
stock
but
but
but
i
agree
with
bill
i
think
there's
room
to
run
there
as
it
relates
to
Michael Baker (Senior Research Analyst)
02:01.830
target
little
little
improvements
will
go
a
long
way
given
where
that
valuation
is
and
what
we're
really
looking
at
are
the
margins
the
margins
do
seem
depressed
but
but
we
think
they
bought
them
and
we
think
they
should
start
to
get
better
possibly
as
soon
as
this
quarter
and
Michael Baker (Senior Research Analyst)
02:17.160
into
twenty
twenty
six
so
so
very
different
valuation
parameters
we
think
they
can
both
work
probably
a
different
investor
owning
them
but
walmart
continues
to
be
one
of
our
top
ideas
as
well
in
fact
it's
one
of
only
two
retailers
in
our
broadwind
and
hardline
universe
that
Michael Baker (Senior Research Analyst)
02:32.390
outperformed
the
market
in
twenty
twenty
four
and
will
so
again
in
in
twenty
twenty
five
? (Reporter)
02:37.910
bill
i
wonder
if
you'd
be
willing
to
take
a
crack
at
costco
because
it's
a
bit
of
a
puzzle
for
the
street
at
the
moment
it
was
such
a
darling
earlier
in
the
year
there's
been
some
work
on
renewal
rates
eroding
maybe
a
little
bit
some
discussion
of
whether
or
not
it's
less
? (Reporter)
02:53.150
convenient
than
a
walmart
but
the
spread
between
the
two
go
into
year
in
the
year
end
it's
it's
remarkable
Bill Simon (Former CEO)
03:00.110
costco
has
always
been
a
phenomenal
retailer
they're
they're
able
to
do
things
particularly
with
their
people
that
you
know
we
were
always
envious
of
that
some
of
their
merchants
have
been
there
for
ten
fifteen
twenty
years
buying
the
same
category
and
the
depth
of
their
product
Bill Simon (Former CEO)
03:13.310
is
really
kind
of
unmatched
so
we're
pretty
excited
about
Bill Simon (Former CEO)
03:16.510
i've
always
been
excited
about
costco
as
a
retailer
i
think
the
challenge
for
them
probably
is
in
the
format
i
think
demographics
are
shifting
away
from
the
big
club
size
packages
and
i
think
costco
is
still
trying
to
find
its
way
through
that
i
wouldn't
i
wouldn't
undervalue
Bill Simon (Former CEO)
03:30.790
them
at
all
i
still
think
they've
got
a
lot
a
lot
of
runway
to
go
they're
they're
just
so
good
and
so
good
in
their
merchandising
categories
and
their
product
buying
capabilities
really
unmatched
? (Reporter)
03:41.310
michael
which
retailers
will
find
tariffs
to
be
still
a
headwind
in
twenty
twenty
six
we
heard
that
we
heard
sort
of
little
bits
and
pieces
of
that
in
some
conference
calls
ulta
was
one
that
sort
of
stood
out
in
my
mind
in
terms
of
not
seeing
the
tariff
impact
but
it
will
be
? (Reporter)
03:54.070
passed
on
to
the
consumer
going
forward
where
should
we
look
for
that
impact
yeah
Michael Baker (Senior Research Analyst)
03:59.030
the
tariffs
certainly
impacted
in
twenty
twenty
five
and
we
think
we'll
again
in
twenty
twenty
six
just
because
of
the
timing
of
of
where
where
those
impact
we
don't
think
it'll
be
any
worse
next
year
in
fact
there's
going
to
be
about
even
in
twenty
twenty
six
versus
twenty
Michael Baker (Senior Research Analyst)
04:12.510
twenty
five
footwear
Michael Baker (Senior Research Analyst)
04:14.110
is
an
area
that
that's
certainly
feeling
tariffs
dicks
has
been
able
to
absorb
that
really
well
and
and
is
doing
very
well
and
in
fact
is
one
of
our
top
picks
for
next
year
but
that's
an
area
where
we
think
we'll
continue
to
see
some
tariffs
next
year
but
again
on
a
year
over
Michael Baker (Senior Research Analyst)
04:28.070
year
basis
tires
are
going
to
be
relatively
neutral
so
in
in
that
sense
not
our
biggest
concern
heading
into
twenty
twenty
six
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