Another Opportunity to Buy More Walmart

Tweet

Earnings calls are sometimes an interesting thing. You can, for example, beat expectations, but still not paint a rosy picture for the future and short term investors react. I say short term investors for good reason. As I always say about companies you invest in, you are not buying the stock so much as you are buying the company. And Walmart, being the world's largest retailer and #1 in groceries, plus its swift moves to adapt to changing consumer habits, I think despite any short term hiccups that the company remains solid. Therefore, as a long term investor, I see today's steep dip on the less than rosy outlook as an opportunity to buy more shares. And I will. All Walmart essentially said is that because of inflation, consumers are buying less discretionary items. That makes sense. Otherwise, all other aspects of their business is strong, and they continue to bring in more and more higher income households into their stores to save money on groceries—an ongoing strong part of their business. Although there are tinier margins on the grocery side of course. That all said, the one big miss I do see with Walmart is that with all of these "unlikely" new bodies coming into their stores, now is their opportunity to improve the overall customer experience so that when inflation dips and eventually goes away, those customers may be likelier to return. If there is one area I have little confidence in, it's that. Walmart lacks terribly in the overall customer experience and it is definitely something to keep an eye on. When you are a retailer, those dollars spent by more affluent customers is very important to the bottom line. Especially when it comes to the discretionary side of their business. Because there, the margins are much higher, and you want willing and able spenders to be in your stores to deliver them.