Walmart's results show 'it's firing on all cylinders', says fmr. U.S. CEO Bill Simon

Walmart's Performance & Strategy - Walmart's stock experienced a nearly 5% decline despite raising guidance for the year [1] - The company acknowledged rising tariff costs [1] - Walmart achieved top-line growth and expanded its margin [3] - Walmart repurchased 16 billion USD of stock on top of the 4 billion USD bought back last quarter [3] - Walmart's US margin increased by 26 basis points this quarter, following a 40 basis point increase last quarter [7] Tariff Impact & Inflation - There was no immediate tariff impact on Walmart's business, with inflation at 1% [5] - Approximately two-thirds of Walmart's sales are domestic, primarily food, which is considered high-velocity and less susceptible to tariffs [6] - Walmart has room to absorb some tariff costs due to margin improvements [7] One-Time Insurance Adjustment - Walmart experienced a significant one-time adjustment related to insurance costs for disability and other claims [2][4] - This adjustment is not considered a systemic issue and will be adjusted in future reporting [5] Target Comparison - Target's margin was down 100 basis points, while Walmart's was up, indicating Target is more impacted by tariffs [9] - Target faces a steeper challenge due to tariff impacts and a lack of a strong food business to offset them [9] - Approximately 70% of Walmart's products are domestic and not subject to tariffs, contrasting with Target [8] Gross Margin & Sales Volume - Same-store sales volume significantly benefits Walmart's operating margin due to its large fixed cost base [13][14] - Strong same-store sales growth of around 4% to 45% generates substantial cash flow due to supply chain and retail operating efficiencies [14]