Walmart's Sam's Membership Grows: Will Renewal Strength Last?

Core Insights - Walmart Inc.'s Sam's Club showed strong membership growth in Q3 of fiscal 2026, with a 7.1% year-over-year increase in membership income, driven by member count growth, stable renewal rates, and higher Plus member penetration [1][8] - The company emphasized the importance of strong renewal rates and member engagement, with digital tools like Scan & Go seeing a 36% adoption rate, up 450 basis points from the previous year [2][8] - Comparable sales for Sam's Club, excluding fuel, rose by 3.8%, with e-commerce sales increasing by 22%, indicating strong member activity and repeat shopping behavior [3][8] Membership and Engagement - Membership income for Sam's Club increased by 7.1% year over year, while overall membership and other income grew by 13.1%, highlighting the importance of recurring fee revenues [1][8] - Strong renewal rates were supported by higher engagement levels, with members increasingly utilizing digital features for in-club and curbside services [2][4] Sales Performance - Sam's Club's comparable sales, excluding fuel, increased by 3.8%, with transaction volume up by 3.9%, attributed to steady member activity, particularly in grocery and general merchandise [3][8] - E-commerce sales advanced by 22%, with continued strength in club-fulfilled pickup and delivery, enhancing member convenience [3][4] Competitive Landscape - Walmart's shares have increased by 19.6% over the past six months, outperforming the industry growth of 17.3%, while Costco's shares declined by 5.7% and Target's increased by 0.6% during the same period [5] - Walmart's forward 12-month price-to-earnings ratio is 39.04, higher than the industry average of 35.34, indicating a premium valuation compared to Target but a discount relative to Costco [6]