2Q16 performance for Walmart’s Sam’s Club
Walmart’s (WMT) Sam’s Club segment posted sales of $14.7 billion in 2Q16. That was down 0.9% compared to 2Q15. Results were affected by lower energy prices. Excluding fuel sales, Sam’s Club posted sales growth of 2.8% year-over-year. Walmart opened three new Sam’s Clubs in 2Q16, taking the store count to 651.
Sam’s Club’s store comps (comparables) rose 1.3% year-over-year, boosted by higher store traffic that was up 0.5% and increased ticket size that was up 0.8%. E-commerce results aided store comps by 0.6% for Sam’s Club. Target’s (TGT) overall store comps of 2.4% were also boosted by 0.6% due to higher web sales.
Sam’s Club’s mobile sales saw double-digit growth in the quarter. Walmart launched prepaid club pickup and is testing mobile check-in and drive-through at select locations. Walmart also launched Shocking Values deals on samsclub.com. This initiative provides special prices on products for a limited period.
Improving web performance will likely be an important element of Walmart’s Sam’s Club strategy going forward as the retailer looks to attract more millennial and urban shoppers.
In Part 5 of this series, we’ll look at the e-commerce performance for Walmart and its peers in the last quarter.
Sam’s Club’s sales benefited from higher membership income, which rose almost 6% year-over-year. The company attributed the gains to the benefits offered by the club’s Plus memberships, according to comments by C. Douglas McMill0n, Walmart’s president and CEO (chief executive officer). Plus memberships offer members enhanced shopping hours, exclusive deals, discounts on merchandise, and cash rewards.
Like Walmart U.S., comps for Sam’s Club saw the highest traction in the health and wellness category, which posted a mid-single-digit gain in comps. Comps for grocery and beverage, consumables, and home and apparel each increased in the low single digits. Comps were negative for Fresh/Freezer/Cooler and Technology, Office, and Entertainment.
Sales of electronics have been pressured, as online deals by web-only sellers such as Amazon (AMZN) create pricing pressures and lure buyers away from brick-and-mortar retailers.
Walmart, Target, and Costco (COST) together make up ~17.6% of the portfolio holdings of the VanEck Vectors Retail ETF (RTH). Walmart, Target, and Costco together constitute ~2.7% of the holdings in the iShares S&P 500 Value ETF (IVE).