Reduced tobacco sales impacted comps
Walmart (WMT) managed to improve the comparable sales at Sam’s Club. There was significant pressure due to decreased tobacco sales. However, the growth rate stayed very low. The segment’s comparable sales, ex-fuel, increased 0.3% in the first quarter. The benefits from a 4.7% increase in the traffic were mainly offset by a 4.4% decline in the ticket size.
Walmart’s management stated that discontinuing tobacco sales at certain clubs had a negative impact on comparable sales by 2.7%. However, the net sales increased 0.6% on a YoY (year-over-year) basis to $12.5 billion, which reflected higher traffic and growth in e-commerce sales.
The e-commerce sales increased 28% due to the continued expansion of direct-to-home and Club Pickup offerings. Digital sales contributed 40 basis points to the first-quarter comps growth rate. Investments in the price and fresh categories and free delivery for Plus members are driving the traffic at Sam’s Club.
The membership income rose 0.9% YoY due to growth in the Plus membership tier. Net sales, including fuel, increased 1.5%, while the comps increased 1.1%.
Sales by categories
The comps in the grocery and beverages category marked mid-single-digit growth due to growth in soda, snacks, spirits, and candy. The consumables category registered high-single-digit growth in the comps due to growth in pet, baby care, and paper goods. The fresh-freezer-cooler category marked a low-single-digit increase in the comps, which reflected continued growth in the deli and frozen category.
The comps in the home and apparel, health and wellness, and technology, office, and entertainment categories saw low-single-digit growth.