Walmart (WMT) released its second quarter earnings, inching past top and bottom line estimates. The retail giant also raised its full-year sales and profit guidance after seeing strength in the consumer. As many consumers have felt the pressure of inflation, with some retailers and financial analysts claiming there has been a more discerning consumer, why has Walmart seen this level of success versus some other retailers?

Forrester Research retail analyst Sucharita Kodali joins Wealth! to give insight into the strength of the consumer and what it means for the broader market moving forward.

"I don't think that I'm as optimistic about the future of the retail economy and the consumer attitudes as maybe the market seems to suggest. And the reason for that is that what I'm looking at is how is growth relative to inflation, and what we've seen over the last several months, and definitely the most recent retail data from the [US Census Bureau] suggested the same," says Kodali, "which is that consumer spending is essentially in line and in some categories below the rates of inflation. So that means that even though the numbers may be positive, the consumer is really, really softening."

She follows that up, claiming Walmart's numbers are coming from lower-income consumers taking on more debt:

"They are the most stretched, and they are likely driving some of these strong Walmart numbers, because even though Walmart is growing, a lot of other retailers are not. So Walmart's growth, I would argue, is probably coming at the expense of other retailers that consumers may have been spending money with during the pandemic."

Catch the full interview with Walmart Chief Financial Officer John David Rainey from Thursday morning.

For more expert insight and the latest market action, click here to watch this full episode of Wealth!

This post was written by Nicholas Jacobino