The problem is that the stock rallied into the earnings report, as investors' expectations for flat or higher guidance began to grow, explained TheStreet's Jim Cramer, co-manager of the Action Alerts PLUS portfolio. Cramer answered viewers' questions from the floor of the New York Stock Exchange.
The drop in expected revenue makes sense -- Walmart faces a soft market in Brazil and is closing some U.S. stores, Cramer said. But investors were still caught off guard. And even though the shares now yield 3%, Cramer said he prefers Action Alerts PLUS holding Costco Wholesale (COST) to Walmart.
Exclusive Look Inside:
You see Jim Cramer on TV. Now, see where he invests his money and why Costco is a core holding of his multi-million dollar portfolio.
Want to be alerted before Jim Cramer buys or sells COST? Learn more now.
What about Macy's (M) ? The retailer has seen a solid rebound after it was oversold down to $34. But Cramer is holding off on pulling the trigger. Investors should see what kind of earnings VF Corp. (VFC) reports on Friday before taking a position in Macy's, he said.
Sticking with retail, one viewer wanted to know if the management change at L Brands (LB) is good or bad. CEO Les Wexner is taking over as CEO of sub-brand Victoria's Secret after its CEO Sharen Turney announced she was stepping down.
Cramer said Wexler has ruled the company with an "iron fist," and that both he and the company are winners. L Brands' most recent earnings report was actually pretty good, he said, so investors looking to get long can buy half of their position right now.
A viewer asked if now is the time to buy Boeing (BA) after the stock's sudden fall and equally sudden rebound. Cramer said no -- the company currently has the SEC investigating it over accounting irregularities. Don't invest in a company with accounting issues, he said.
But there are ways to invest in Boeing without investing directly in the stock. Instead, investors can look to aerospace suppliers like Honeywell (HON) and -- for investors looking to "bottom fish" -- Alcoa (AA) .