Yahoo Finance Wal-Mart's (WMT) Sam's Club Expands Further to Cape Coral - Analyst Blog
Sam’s Club, a subsidiary of retail giant Wal-Mart Stores Inc. (WMT), forms an important part of Wal-Mart and it is gaining significance gradually.
It recently opened its latest outlet at 301 SW Pine Island Road, Cape Coral, which will thereby create 170 jobs.
Sam’s Club contributed $12.7 billion of sales in third-quarter fiscal 2015, up 2.3% from the prior-year quarter, excluding the fuel impact. Sam’s Club’s comps, excluding the impact of fuel sales, increased 0.4% versus an increase of 1.1% in the prior-year quarter. Comp traffic was up 0.2%, while average ticket increased 0.2%.
Sam’s Club is geared to improve its comps and is taking several strategic steps to attract consumers. In the beginning of 2015, Sam’s Club announced its plan to offer $20 gift cards to all its members who join Sam’s Club or renew their existing membership before Jan 31, 2015. Members can use these cards to purchase electronics, jewelry, or apparels of all brands. (Read: Wal-Mart's Sam's Club Offers Membership Gift Cards)
Recently, it introduced an exclusive furniture line-up — The Black Mountain Collection — designed by author Nicholas Sparks and inspired by his latest book, The Longest Ride (2013), and the upcoming movie based on this novel. (Read: Wal-Mart's Sam's Club Launches New Furniture Collection)
We are encouraged that Sam’s Club results are improving of late and the company expects to invest more in the e-Commerce business and Sam’s Club. However, we cannot ignore the fact that Wal-Mart is currently grappling with sluggish sales and a tough macro-economic environment. In the recently reported third quarter of fiscal 2015, the company narrowed its guidance for fiscal 2015. The company also expects higher U.S. health care costs and tax rates to hurt profits in fiscal 2015. Not only this, currency headwinds, cut in food stamps and sluggish economic environment are likely to hurt the top line in the upcoming quarters. (Read: Wal-Mart's Q3 Earnings In Line, Sales Beat; View Narrowed)
Currently, Wal-Mart has a Zacks Rank #3 (Hold). Ingles Market, Inc. (IMKTA), The Kroger Company (KR) and Etablissements Delhaize Frères et Cie "Le Lion" (Groupe Delhaize) SA (DEG) in the same space are expected to do well in the near term.
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