Israel “Izzy” Englander, a billionaire portfolio manager and CEO of Millennium Management, has made headlines by selling 8.1 million shares of Walmart (NYSE: WMT) during the third quarter, as revealed in Millennium’s recent 13F filing.
What makes this significant? Prior to this sale, the fund had been steadily increasing its investment in Walmart for three consecutive quarters.
The initial question arises: why would Englander choose to reduce his Walmart stake now? Upon reflection, this decision appears to hold merit.
Let’s explore Walmart’s recent performance and why selling the stock at this time could be a smart strategy.
Walmart’s Strong Performance in Recent Years
The past few years have presented many challenges for retail stores. Inflation rose to its highest levels in decades, prompting the Federal Reserve to implement aggressive interest rate hikes. These two factors, rising costs coupled with high rates, forced consumers to be more budget-conscious, leaving many retailers exposed.
Amid these macroeconomic challenges, Walmart has stood out as a success story. The following table details Walmart’s same-store sales trends over the past year across different markets:
| Category | Q3 FY24 | Q4 FY24 | Q1 FY25 | Q2 FY25 | Q3 FY25 |
|---|---|---|---|---|---|
| Walmart U.S. same-store sales | 4.9% | 4% | 3.8% | 4.2% | 5.3% |
| Walmart Mexico same-store sales | 8% | 6.3% | 9.2% | 5% | 4.4% |
| Walmart Canada same-store sales | 5% | 1.5% | 3.8% | 3.4% | 3.1% |
| Walmart China same-store sales | 18.6% | 6.6% | 12.5% | 13.8% | 15% |
Data source: Walmart investor relations.
Walmart has demonstrated consistent growth in same-store sales across the globe over the past year. The company attributes its success primarily to increased shopping frequency and higher average transaction amounts rather than simply passing inflation costs onto customers.
Image source: Getty Images.
Why Did Millennium Make This Sale Now?
Walmart’s impressive stock performance coincides with a declining inflation rate, as illustrated in the chart comparing Walmart’s stock price to U.S. inflation over the last three years. The share price has surged as inflation has softened.
WMT Total Return Level data by YCharts.
Over these three years, Walmart has delivered a remarkable total return of 93%, outperforming the S&P 500 nearly three times over. Notably, Walmart’s share price sits at $89.67, just shy of its historical peak.
If Englander felt optimistic about the economy and anticipated further declines in inflation, one might question why he didn’t maintain his stake in Walmart. However, the situation is likely more complex.
Looking Beyond Retail
It seems that Englander’s perspective on the economy isn’t the driving force behind Millennium’s decision to reduce its Walmart shares. Instead, the fund might be cashing in on its profits following a strong uptrend in Walmart stock.
Despite Walmart’s solid footing in retail, it faces increased competition with the holiday season on the horizon. Even though Walmart’s recent financial outlook appears positive, awareness of rivals like Amazon and Target is prudent.
Moreover, Millennium’s latest 13F report reveals significant sell-offs, including shares of Amazon and Apple, two strong players in the consumer market. Conversely, the fund’s recent purchases included investments in Microsoft, Spotify, and Eli Lilly.
This strategy indicates that Millennium is pivoting away from defensive stocks like Walmart and reallocating resources towards higher-growth sectors, such as artificial intelligence (AI) and healthcare.
Is Walmart a Good Investment for $1,000 Today?
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Adam Spatacco has positions in Amazon, Apple, Eli Lilly, and Microsoft. The Motley Fool has positions in and recommends Amazon, Apple, Microsoft, Spotify Technology, Target, and Walmart. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
