Credit: Shutterstock photoSam's Club, a membership-only warehouse club operated by Wal-Mart ( WMT ), contributes about 12% of the company's revenues and 6% of the company's value, as per our estimates. This is because Sam's Club operates on a lower operating margin than Wal-Mart's other segments. We expect Sam's Club to report a gross margin of around 12% in 2016 compared to about 27% for the other Wal-Mart divisions.
Going forward, we expect Sam's Club revenue to grow at compounded annual growth rate ( ) of 3.1% through 2021, faster than the revenues from other segments, which we expect to grow at a CAGR of around 1%. Sam's Club is expected to grow on the back of initiatives such as of improving the food in the stores and expanding warehouses in higher-income areas.
Going forward, we expect Sam's Club revenue to grow at compounded annual growth rate ( CAGR ) of 3.1% through 2021, faster than the revenues from other segments, which we expect to grow at a CAGR of around 1%. Sam's Club is expected to grow on the back of initiatives such as of improving the food in the stores and expanding warehouses in higher-income areas.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
