Chris Hill: Let's move on to Walmart,
which is in the headlines for a couple of reasons.
Walmart cut earnings guidance for 2019.
That's largely due to the acquisition of Flipkart,
which is the e-commerce business in India,
which Walmart acquired,
and that costs money.
Walmart had said they were going to be doing
this, so this cut in guidance is not really a surprise.
They also announced a new partnership with
Advance Auto Parts to sell products online
and offer delivery. Walmart shares are actually
up slightly, Advance Auto Parts down a little bit.
I'm not entirely sure why that is, because
on the surface, that would seem like a great
partnership for Advance Auto Parts. I haven't
seen the numbers on how the deal breaks out.
Maybe this is an expensive deal
in some way for Advance Auto Parts.
Bill Barker: I think that's the interpretation,
that Advance Auto is not getting some great deal here.
I think, being the third player, quite a bit
behind, I would say, O'Reilly and AutoZone,
in terms of the success of
their model, is getting a bit of a lifeline here.
That may be unfair, to characterize
them as lagging by that much.
But I think it isn't the case that they have
stolen a great deal here, at least in the
eyes of the market today.
But AutoZone is down more, perhaps perceived
as having additional competition now and not
being the favored stock by Walmart.
I think O'Reilly's doing well enough
that there's not as much concern.
It's not off that much today.
Hill: That's certainly one of the advantages
we've seen over the past 15, 20 years for
these huge businesses like Walmart, like Costco,
where they are largely able to dictate terms
to businesses that want
to be partnering with them.
Barker: Yeah. One other thing -- Advance Auto Parts
is off a little bit today, but it's really right
at its high for the year.
These things have all bounced back after being
way off and given up for dead toward the middle
of last year when Amazon made headlines for wanting
to get more aggressively in the auto parts space.
Everything sold off tremendously and has been
doing very well, I would say, since bottoming
out between the summer and the fall last year.
Really, Advance Auto Parts has doubled off of its low.
The business is not
as choppy as the stock price.
They are, I think, raising the
floor on how things look for them.
