Walmart (WMT) reported second-quarter earnings that beat expectations for both revenue and profit. The company also raised its full-year guidance. Michael Baker, managing director and senior research analyst at DA Davidson, talks to Catalysts about Walmart’s future prospects.

Baker notes that he is “not surprised” by Walmart’s strong performance and that their results “look better than most retailers.” He points out that Walmart is “gaining a lot of market share” and that “their trends are better than the general consumer environment.” In contrast, Baker suggests that competitors like Target (TGT) have lower expectations and are unlikely to match Walmart’s earnings results.

“In this environment, where we think the consumer is still very tight on cash, the focus is on valuables and consumables rather than non-essentials. And that favors retailers like Walmart,” Baker tells Yahoo Finance.

Baker emphasizes that Walmart’s success goes beyond simply offering value. He highlights the company’s investments in convenience, improved product assortment and store upgrades, explaining that “all of these things not only help them gain market share, but also maintain that market share.”

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This article was written by Angel Smith