Walmart "flexed its muscles" in an inflationary environment with a solid third quarter out on Tuesday, says Jefferies analyst Stephanie Wissink.
But the world's largest retailer also posed in front of fierce rival Amazon (AMZN) by adding a significant number of new third-party sellers to its Walmart.com business. Walmart (WMT) said it added about 21 million new items to its online marketplace in the third quarter.
Growing its marketplace business to take on Amazon's dominant position has been a key focus by Walmart execs in the past 12 months.
The progress — and potential for market share gains as Walmart is viewed by consumers as a place that has everything just like Amazon — isn't lost on Wissink.
"That's a big increase [in items]. I think it's also reinforcing to the market that Walmart is viewed by merchants and vendors as a marketplace for sellers and a new destination to build value. The customer reach that Walmart has is very much competitive. And the marketplace sellers are finding that the opportunity exists for them to reach those consumers through the Walmart engine. I think that really impressed us, and surprised us in terms of magnitude. I think you start looking at the secondary ecosystem of value creation, Walmart is really starting to put points up on the board," Wissink said on Yahoo Finance Live.
Here is how Walmart performed compared to Wall Street estimates for the third quarter:
Total Sales: $140.53 billion vs. $135.6 billion
Diluted EPS: $1.45 vs. $1.40
Walmart's stock fell nearly 3% to $142.91 as analysts voiced concern about operating margin declines in the quarter for the retailer's U.S. and international businesses. The company pinned the margin pressure mostly on supply chain inflation.
The earnings day sell-off masked a generally upbeat stance on the holiday season from Walmart. Execs backed that up by lifting their full-year earnings guidance to "around" $6.40 a share from $6.20 to $6.35 a share.
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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