With many companies pointing to weaker consumer spending as a headwind, all eyes are on Walmart’s (WMT) second-quarter earnings on Thursday, August 15. Michael Lasser, hardline and broadline stores and grocery retail analyst at UBS in the US, joins Market Domination to analyze what investors need to know before focusing on Walmart’s earnings report.

“We expect overall consumer growth to remain consistent. It’s important to remember that Walmart primarily sells groceries and other household products and is gaining market share, so what Walmart has experienced will be a little different than what other retailers have experienced,” Lasser explains. He expects alternative profit areas like advertising and membership fees to grow “very quickly” since they’ve driven the stock price up so much recently. He also expects Walmart to raise its full-year guidance, adding, “All of this means the bull market for Walmart is intact and will likely support the stock from here on out.”

He notes that Walmart will likely benefit as consumers continue to face inflationary pressures, as the company is seen as offering the “best value in retail.” As food continues to be expensive, consumers will be more likely to rely on Walmart for their reasonably priced grocery shopping. Lasser explains that Walmart sells one in every five groceries in the U.S. and will benefit from the trend toward home-cooked meals.

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This article was written by Melanie Riehl