Walmart (WMT) 17 May 182018 Q1 Earnings call transcript

Company Profile

Participants

Kary Brunner	IR
Oliver Chen	Cowen & Company
Simeon Gutman	Morgan Stanley
Chris Horvers	JPMorgan
Matt Fassler	Goldman Sachs
Edward Kelly	Wells Fargo
Bob Drbul	Guggenheim Securities
Peter Benedict	Robert Baird
Paul Trussell	Deutsche Bank
Robbie Ohmes	Bank of America Merrill Lynch
Karen Short	Barclays
Ben Bienvenu	Stephens
Dan Binder	Jeffries
Kate McShane	Citi
Greg Melich	MoffettNathanson
Rupesh Parikh	Oppenheimer
Bobby Griffin	Raymond James

Call transcript

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Operator

Greetings and welcome to Walmart's Fiscal Year 2019 First Quarter Earnings Release. [Operator Instructions]. I’d now like to turn the conference over to Kary Brunner. Please go ahead.

Kary Brunner

Thanks, Rob. is the and Walmart This the here everyone of rest Investor morning Kary I'm Brunner with Good Relations team. us joining for on today. call Thanks the I we and for will brief open questions. it up begin then a with will overview

identified subject a statement website comparable annual and Accordingly forward-looking quarter and segments. slide allocations our the commentary call the statements in investor to out like portion during at presentation on release, website. overhead other corporate our are stock.walmart.com presentation. the accompanying of operating be this quarterly on SEC to previous this current reminder our our period's and operating to available We Harbor and As uncertainties press the relations management that factors would certain QX corporate the risks, in Company are income may Safe revises filings. was I which to to point make recast

me quarter we discuss Overall our results. company. So the now across let QX solid a had

We made are are across XX% last continued net seeing. basis $X.XX, On currency was Adjusted encouraged we a sales year. the and consolidated EPS versus constant by a momentum up the X.X%. a business increase the were progress

the You rule to EPS $X.XX would on main investments. equity to losses is some requires was have recognize EPS difference us the per noticed adjusted which share, versus accounting GAAP related new gains or

stock a jd.com price loss since causing in quarter stakes. decreased in solid acquired gains have this the we During the our still we accounting but shares

negatively cool in quarter has again We with comp first through seen contributed into our weather were strong trending as line merchandise XX would four growth, business Sam's and reported positive had top accelerated were the higher comp. including early to by a quarter International help picked our comps sales April markets were U.S. comp in earlier weather few of pull somewhat first general U.S. the The sales in another points increased comps Walmart by sales e-commerce growth was This traffic. timing basis that XX% up of normalize. sales quarter Our XXX eight sales the market. but traffic have April. our driven Easter X.X%, of strong the forward largest comp Walmart markets. and bottom Club some impacted

years guidance As in update quarter our past full will we certain year release. with second

strategy. good we focused in So to be momentum and on the we happy would effectively have your more We're take our closing distributing With business. in we're executing customers that on questions.

Operator

Instructions]. [Operator

& line Our Please of first proceed Company. the Cowen with with Oliver your question comes today Chen from question.

Oliver Chen

and in the say e-commerce there you regarding over of you this profitability would quarter's ahead. will profitability aspects is the question Our showed e-commerce or What on momentum growth us more terms main about improve be of some and how drivers generally driving you. focus time in Thank and you guidance in help nice quarter your growth the you're versus improvements that helpful. some thinking could are would if which balancing

Kary Brunner

in with with pleased QX performance e-commerce for U.S. XX% really business are our growth. We

also to the us right introduce expansion grocery our number initiatives delivery think grocery of to executing as with year momentum a in seem help and pricing and Online e-commerce achieve will progress the online of the combination good of seeing assortment this school. fundamentals grocery make well as net We are full sales us right continue U.S. year. a there the a you've and by We is marketing. of including e-commerce growth supported our contributor

goal. were So our with where we're pretty pleased meet QX we're year direction turning and in to right to we the full

Oliver Chen

Okay.

that you you're impressive Thank any that been Are also would the economics happy there customer versus other what on there. customers nature the Just for may omni-channel expanding of love speed you. Are which your mean that's of on customer? it and at that. any thoughts mechanism with lastly curbside the pick-up thoughts

Kary Brunner

with been online really have very the love we Yes grocery. Sure. convenient service, Customers pleased for it's them. very

scores you it's for initiative important net as and know are very us. so strong an Our promoter still

locations out they We end year by as they year to We choose pick-up. rolling online the an the Walmart this providing are additional shop. reach locations shop and the customer see for to ways thousand choice with this convenience XXXX it providing just all grocery of as the can

Operator

with Lasser with question next question. line The from the proceed your UBS. is Michael of Please

Unidentified Analyst

It's Michael the the growth sales? of dig is weather U.S. on Lasser. any you comp e-commerce business quantify bit, impacts and to then in-store for Marco into I the accelerating guys Thanks. on a wanted can cannibalizing

Kary Brunner

Yes faced well at of merchandise we that cool have with quarter did the business headwinds some kind some strong was really the of as as We seasonally some weather general April the categories U.S. weather of impacted those traffic in categories. our sensitive in end quarter. some

turning the Overall as of has around health As normalized. is of we've are categories very business some weather the QX started strong. those

continues business sales strong that to quarter was well. this our you grocery Our saw traffic as have good and ticket

of good. health So the is very overall business

Unidentified Analyst

less did Thanks. as grocery than is up online pick delivery then growth more to pick rollout impactful follow-up Oliver's And to a grocery stores e-commerce contribute and the question, how up? much typically more to of or

Kary Brunner

as both to grocery contributing home it overall contribution well Yes, online ship factor a to XX% the our in pickup. as growth of is

Unidentified Analyst

versus delivery the on pick-up? then And

Kary Brunner

choice Yes additional across the for really just online and Clearly has we we customers starting [indiscernible] provide Wal-Mart. more are to customers. shop customer pickup can think can the roll grocery providing to U.S., this choice it's so service we appreciated is the important just another an make that delivery and we think out

Operator

you. Thank

is from Please question. Stanley. with Simeon the of with Morgan proceed question your line next Gutman Our

Simeon Gutman

maybe it's sort up of weather you're follow weather I impact. the want bed to guess on the I and and this to question to put choosing quantify maybe hard quantify not to Kary,

would higher going so to weather know expected you traffic the on think that have a bit guess comment you are that and then not can you're you kind you to around question the quantify I whether or any some I the have important so if investments if I but be price not think impact. is it making little

Kary Brunner

Yes.

As was and this growth our the material unit traffic grocery impacted merchandise sales, solid and morning, and sales. grocery our weather you in really saw traffic business very general then overall our categories with in strong

So in areas like areas [indiscernible] in like know you things are sporting that. that apparels like goods, swinsuits

sales. weather was was were it, it So did and trending primarily a didn't categories cooler merchandise before, it hit quantify [indiscernible]. headwind, we in comp traffic really weather call this specific to general us to the but We sales

Simeon Gutman

does that get captured you just the both in does that it ticket follow-up my and at the the look is comp, captured is in Okay, if traffic get and in captured alone? the acceleration, traffic e-com where or

Kary Brunner

the touches its will traffic and store No it ticket. traffic network. If impact our it

Operator

question the from next Chris Our of Horvers line with comes question. your Please JPMorgan. with proceed

Chris Horvers

look best so two if of you to the the third hurricane the take you to at going the ask my try quarters half in quarter. back know similar questions, I'm past 'XX, you out

comping like of good approximation X/X you're X/X range weather. kind underlying that of did in know sort of ex-the is business the of You sort that a

Kary Brunner

not impact. the are we weather again Yes, quantifying

stronger, quantify did been weather the impact it categories was than less strong has that We business other was it we turned categories. some we as of weather impact are and say our see consolidation sales, grocery sales ticket normalized around have trip result was a with has impacted you those on going impacted, to an but and traffic told have the not

Chris Horvers

in by into first wanted help context first Also the a XX% us so the quarter growth, it XX could to maybe you organic here. put in was fourth XX all [indiscernible] e-commerce clarification the and the quarter then versus the

know strategy XQ. assortment it the acceleration a that helped in turned around in drop pricing XQ course or really off You that that drove you then -- and know any factors out you may drove XQ did refresh on reverse that you for that be in off bridge

Kary Brunner

and there. about of approach our Yes in you'll certain most line plan planned factors better to QX to a the due impacted categories primary bottom talked that recall be so relative rate to year headwinds was driver was e-Commerce that of QX the in down and and mix to we number prior in promotional we the growth it overall some create a healthier that prior in really of top year

goals. as have redesign, pickup are think out the recently overall our component announced like the the business of certainly what kind had in we not that said to We're but be You been year and new online expected saw. rate Things grocery new think accelerated the site know full QX as higher [indiscernible], pleased we that's has locations fundamentals there growth our and to we about rolled that in really better, QX, reach the the component. expanding really reaching a well delivery the XX% recently executing we initiatives

a So will fundamentals contribute and to the talks that down right shop customers all right on you just serve executing these they there factors so will it being lot about experience our overall comes then the goals. the and online the assortment and can fundamentals contribute the to the scaling right to price, growth with that's just Mark

Operator

Thank you.

the with Goldman question. is question Our Please of Sachs. line next from Matt proceed your Fassler with

Matt Fassler

Walmart at U.S. more leverage function Or was you tech on ratio spoke of and investments question some on fact the in the first pace a relates business having all the about e-commerce. the sales U.S.? slipped the deleveraged investment stores in the that that incremental late overall in quarter? of you're Is My in to the expense this change business deleverage within the the of the and but

Kary Brunner

our that done to and that we such Yes, the continues are leveraging e-commerce and operating technology that. were we've work headwind expenses within with pleased store and U.S. store the stores expenses U.S. are quarter. very our The business business really efficiency technology and Wal-Mart to ability operate efficiently leverage the that we the contributing leverage pleased to around in to

Matt Fassler

a And year? investment you'd to is something think it, as persist the piece through that digital that expect you of have you do that about

Kary Brunner

some tax e-commerce was in We the business technology. in did we that of made of as to the received QX that choices of about a result and there we reinvest reform areas and and in one talk and the components strategic benefits reinvestment

area is benefits. those as this year as of that a a tax well So focus result

Operator

from Grom question. next Haskett. proceed your is question Chuck the Our line with with Please of Gordon

Unidentified Analyst

drag is to gross price we between [ph] If of for the Chuck. in investments business there margins actually U.S. the is business, the headwind? anyway and decouple look John on at Park kind This the just

Kary Brunner

to did do overall invest of the be out as to are well transportation we rates U.S. expect as as in a U.S. the of see expenses, tick in important result past. in overall some to the margin gross of increased again we headwind strategy We that a about each in and we We from in we it's component didn't the but up our the seeing talked continue break price trucking prices as a we between impact components quantification market breakout but didn’t higher the decline. have fuel

Unidentified Analyst

loss how then And just the of a and business gears guess the bit, banking big switching Sam's? store disposal Canadian at in the then closings little I was

Kary Brunner

Canada called related out we the Yes, million loss Bank. to $XX for the

Operator

Our Kelly Edward Fargo. question. next of with with from the proceed your line Wells question is Please

Edward Kelly

you were it to sort just QX the gross about there? bit you in change biggest a improvement and do little Could versus of the the parse what in you decline talk QX out think maybe the was margin if

Kary Brunner

about prices impacting Yes, regarding specifically and Walmart continue as there in in drivers and as within if think is Club to items the through business not the but as overall to and and margin transportation well. U.S. some strategy saw [Indiscernible] Sam's the a the in components also be bit go items, headwinds a little that theirs closures be Club U.S. QX of inventory margin onetime see know business gross about our you Sam's you gross lot some strategically had liquidations thoughtful you as that into of well main and to invest that headwinds the club unique expense well. come you

Edward Kelly

Okay.

labor. heard you follow-up So we from desire SG&A and the and rates over at higher know given side quick to Target point go are you wage particular How on time? their what this thinking about

Kary Brunner

Yes.

rate wage able the to operate be stores. benefit that the $XX starting the one and the talent competitive part that our We're was to to going of an increased that reform get our the tax U.S. do associates markets be recently reinvested into was pleased we received know that. you the from of business we that and for to right in noted we're run in we we As components hour to

Operator

next Drbul from proceed the Guggenheim is line with Our your Securities. with Please question of question. Bob

Bob Drbul

quarters I had the pick store e-commerce. grocery mix you of trends factor factor, and for just at all last talked online impact a Can quarter? Couple this questions, about you business talk talk the gross on can you the about if up margin the about of that any on few margin in guess line outside in in on from gross the

Kary Brunner

question first non-grocery mentioned of think really earlier in overall your grocery, really as we pleased U.S. Yes the outside about Bob our you the up if omni-channel know pick on and with is around well, online progress call there this as you approach up. pickup pick grocery

we're to leverage what convenience we out proximity and general have a You stores in heard up pleased to with rolling towers with matter about that, and really towers doing. the have real our so fully where provide think in we stores about in talk heard order merchandise the automated past pick minutes us additional that's that customers of out be can as and talk us we're opportunity you've is customers exactly and we to a pick our their with up

So those What as strategy question your both we're second side well grocery. on about? grocery non- the overall the with pleased was as

Bob Drbul

on margin gross impact if just you Mix you line called this just the it it wasn’t out was before could called out I wondering had quarter but e-commerce, maybe. from

Kary Brunner

well primary of was that called we this as the experienced quarter. primary so drivers this quarter as were this of price in those the headwind out expense one the drivers Yes transportation investments we the the higher for U.S.

Operator

Baird. Our is your with Benedict next with of the go Peter question ahead from line Robert questions. Please

Peter Benedict

guys comp have major in private to any kind absent section. of these taking doing by was is So it do guys? the been or that you drive decisions brand consumers the it that business, kind focus of lately on steps called just something you you you're us think kind Remind growth U.S. of out making just

Kary Brunner

Thanks Peter.

and the We the we private offer to areas has the every opportunity have opportunity competition national and but quality think overall a example share are of easy customer. as up of focus the so brands but increase house stepped most our to of not strategy when also private prices of have is you our its it's long brands. communicate again on only important seen been We the we brands so that's important really our a to of day Wal-Mart low have as private of national relative your we price brands. new and probably extra to quality to quality our focused brands there's apparel quality the recent wallet brands introduction an in non-grocery in result grocery providing that to on

Peter Benedict

capabilities with of turning Thank in the the And have JD.com that could in just months terms you there to then international capabilities leverage the transcript can where JD.com that there would States. China, China be had talk of be help just and to of some you. of up you here comments to of these you XX can United some maybe in speaking some in here have these fall indications showing U.S., to that in next used relationship you're we taking about guys outside in they comfortable capabilities some see the whatever guys kind the the has

Kary Brunner

Sure.

delivery shared there's levels serve, to script it's the about part we like you customer know practices the those not something of for front certainly think the our but served will companies, a customers called learning so Wal-Mart the of sense business, of able through an expand different for exact one certainly in sharing the that's as building in a efficient and of I learning you have past from and JD.com of portfolio we leverage heritage future. out lot unlike has we're various our as whole learnings are density practices in long If history leverage not to omni-channel population of matter and the how best done to the in U.S. really service. and benefit there's markets leveraging from like something but best its on and sharing be we the learn our we in well as omni-channel stores to are a what getting in so our hour mean XXX continue

Operator

is Our Paul question. with with Deutsche the from line proceed next of your Trussell question Please Bank.

Paul Trussell

a business just than basis? the coming year from through especially now into Club some of remarkably with impacts think Sam's was The thoughts the and walk go the negative initial about should I your of drivers performance better tobacco, out the business on how we comp that forward think

Kary Brunner

Sam's traffic quarter move member and well first the at fresh across Delhi of Sam's with right good a areas some in performance with board is produce did forward. a and business serving really really strong and on Sam's, have assortment value worked Sam's the categories, really continue on and the business just the in performances Club good our we grocery but to continue other good, particularly the had focus Yes, is good in and there across the traffic to to business strong food

Paul Trussell

you circle the number delivery. ultimately a in guys know and the didn’t And back just U.S. pilot delivery, ago out you years overall that to economics work grocery decided on did of [indiscernible] in a for the Denver, did

does understand us help and economics guys? a all why you model today of Just work sudden for the the

Kary Brunner

and know fee their customer get of serve delivered different to the convenience door a the order up approaches been grocery by customer delivery right is Yes, of from customers proximity offerings convenience the another of the can to and $X.XX, Walmart Online the can that's step. have variety the something choose that's and of and of choice the well their customer because really learn for customer leveraging something about to that as opportunity in thought paying received they see for ways. is source we you maturity our pick always for grocery customers provide we different omni-channel tests a that

customer a choice of we're So we really serve us the to that's offer way you we're trying things and see and them doing ultimately lot our approach. that can and omni-channel in in here the best what

Operator

question Ohmes with Please proceed line of your with next Lynch. the Robbie of is Bank Our America Merrill from question.

Robbie Ohmes

Just us.com follow-ups a few the on business.

give first beginning First rollout can us and the that said about new quarter the out already grocery service of GMV to many us partners online is, working Paul's roll had give I'm guys and delivery Brett's I the more question can then up mentioned doing how end how if third with then second of sorry the for you because and thinking the follow the us Lyft. this delivery roughly but the for U.S. coming comments you you're already is at you quarter the Uber and growth think something you locations you was that's grocery you're even maybe I new remind in and was the stopped there know the or

that. thanks So for

Kary Brunner

question. the for thanks Robbie, Sure,

grocery out to around we overall So mentioned in XXXX locations we've continue to U.S. is plan online the around locations more end as reach around by now throughout XXXX locations of the year. year to the and the roll

started delivery end just rule population know this year to grocery the year. of will reach of that U.S. you the the of For that the we and scale XX% about we by

perspective what GMV on we based growth. remarks. reference U.S. So that net is From gave we was upon Brett's net what are are that’s sales targets really our growth e-commerce that's driving focused and the sales in a

on this So we GMV quarter. report didn’t

Operator

with Barclays. Our line your proceed question. of Please is Short question with next Karen from the

Karen Short

the a much question. another just housekeeping One Sam's comp and I picture do comp just bigger then on I traffic question, overall bigger guess comp, picture the benefit then the closures how

Kary Brunner

that’s serve member seeing customer we club to out a the convenience price, our that effectively the results offerings with the good back the at and [indiscernible] and strategy, of we clubs really in that are merchandise that. are right the impact our we we're think gets good and didn’t so specific remember in to pleased closures Sam's of but seeing couple we other right the I and that with that club having traffic to Club ways call had out get question, the from really efficiently the allow

Karen Short

U.S. below question real relevant year-over-year just in just and overall kind profit you but look would at dollars operating our U.S. profit operating when the came My consensus. Okay. reallocations you know say the was of not numbers I giving numbers dollars below some

to came So if wondering or dollar in internally? where came expectations your operating U.S. profit relative they in

Kary Brunner

in you as we're and expense look Overall leverage line as to those as to price guidance about we know business gave invest in to the as not QX, think e-commerce the going business our to see line. have the as in gross profit continue and we margin we well so what the of are to will expense and invest plans you impacts you drivers speak as operating well operating expect on expect gross know we at you but

we're very physical our efficiently the this again You and business progress focused pleased order and had we're stores with U.S. on our know that business, operating they quarter.

I that think this really the stores from expense earlier. to consecutive back gets talked our leverage U.S. and what quarter about we

serving You pleased leveraging that and and efficient the we're change headed direction so to processes more effective know make there. and associates in with technology we're customer

Operator

line question is from Bienvenu Please proceed next with of question. Ben your Stephens. with Our the

Ben Bienvenu

really be contributing really ticket you The strains strong will that the helpful. out ticket parse the quarter consecutive biggest factors ticket. I'm to could curious second if

Kary Brunner

you that contribute to the Again there's Sure, know question. for of Ben. Thanks that a factors number number.

our it back right and and merchandising growth is deliver then component is other strong business, factor both it just to strong. customer been with tickets the a has know really prices We're business as you fresh gives that strong and be on continues contributing with more business to grocery very well. particularly the the for continues as larger the e-commerce comps, as the side to Our baskets well assortment to business our pleased traffic on units

factor that's as from than and in e-commerce nice well. a acceleration So QX one QX contributing

Ben Bienvenu

you're you have quarter commentary here just And another positive question in inflation to around seeing seeing you what what as business. curious the U.S., up I'm extent follow know are any? comp your that about any if grocery cost a quick you in to inflation

Kary Brunner

do you a be see, will impact wasn’t our but we and gets cycles quarter deflation the focused we sale you inflation side really on done our to inflationary know cost on meaningful through business or call the this side we've deflationary to just back it didn't different and overall manning a comp sales the so that From the really it it serving clearly and will cost customer are effective will customer. this time that’s what focused are makes on and on for day be, what serving and long know prices merchants the we every and us in ultimately every

Operator

Our with from of question. the next proceed with is question line [indiscernible] RBC. your Please

Unidentified Analyst

So gas the Can your prices Thanks. impact you weather that sense a the it does the but look big how business us latter gas on are the of also you the did balance seen negative as have about last to prices. that you in trafficking year think April please it up seem in like impact traffic. you've prices thinking the about tell coincide makes it of part impacted swing guys did comps both for on of rise the had because we gas with

Kary Brunner

We certainly our transportation the costs. we fleet gas we as closely, own it as pretty cauht to our a that out margin saw relates rise to it prices in watched and gross line, headwind

$X maybe You we significant like things watch you know gas you perspective see strip levels know range it's and customer from a reach something can in the as that. consolidation certainly prices closely

will closely. impact a but dramatic had I in something think prices recent we its our hasn't on results the probably watch QX most rise gas

Unidentified Analyst

or you year, thinking how about just of kind guys. group helpful. it for you So a are here that guys of that will kind be the assuming just off the kind of we level understands of the general Thanks, trend, balance

Kary Brunner

go, the will where whenever will its cycle going of the to not are it through to watch closely year we manage manage We will rest something predict the does.

Operator

question with next Dan with is Please proceed Binder from question. Jeffries. your the Our of line

Dan Binder

off growth? membership as curious us you immediately they don’t closings membership I we how affected close of just year be how result realize they I'm if XX fall what should this fee will income about and your wondering think a -- assumptions could was I that help when but this are fee understand

Kary Brunner

Dan. Thanks

are was with contributions Club to the shipping level. you membership, part members you new providing members allowed plus and we're business pleased that We to more things adding like as the with on members as of see membership members more value Sam's offer offer upgrade really well and Sam's plus that plus saw has I the continue Club to focused and the premium to as plus the some free upgrading think for on we in new

Dan Binder

earlier? follow-up reason My a charge there lease that out didn’t you the earnings and you was question, Sam's bank for [indiscernible] pull the adjusted the cost in mentioned

Kary Brunner

calls Yes, ultimately to would those just the all out are all judgment time. know and you our goal be items not

that just unique we out called we just items items. So off the quarter, large determined we

Operator

is with the with of question next Our from line McShane Kate Citi. Please proceed your question.

Kate McShane

Walmart general stores Did you merchandise you in as in the impact April? see Sam's did on same weather the at

Kary Brunner

to impacts this business are overall meaningful out quarter. wasn't their and think percentage it their Sam's call as a and their the a little about bit as perspective service the to customer, so you weather clearly a categories the business business from different relative U.S. well Well their sales

Kate McShane

Okay. versus for I was rank the is if And there my size of to the shopping you wondered pick second for in-store? basket any way grocery question or then up grocery quantify versus directory

Kary Brunner

to because be online pick, we omni-channel delivery through customers of spend to so if it you basket in-store, us through have what higher overall know overall spend their part an in-store so you various or of the it than the with choose all and customers Kate and is customer channels be get whatever as important much that's spin they is know have it's whether ultimately the into key that's in part ecosystem nearly our a you a do. in our shop whether it of converted its customers overall as swiped Yes in-store past home us and strategy really customer said us are there's that our in-grocery if really since know we important sizes can

services these what's that exciting is about our customers serve through which a customer, increasingly a in So on you choosing trust effectively behalf orders shoppers are the are are again their where doing fresh you on shopping as shoppers speaks have know shoppers that in of really own personal of our items to the our job and they behalf overall that customer. customer the

Operator

is the Melich proceed question with Please from next with MoffettNathanson. Our Greg your line of question. coming

Greg Melich

X% Just as and the a is it's is two e-commerce then on follow-up like that is the sales on correct in second to things, cost. over numbers now. try we It what with into the have wanted growth percentage quarter, back it little of to the we looks question first

million, guys cost think which through is we run technology a first -- should a quarter that looks it is of incremental the like each or we expect about sort thing in about in that year-over-year costs that sort rate the about Thanks, when should the builds be it You -- that of quarter those talk $XXX is I deleveraging, Kary. was good year.

Kary Brunner

vary of quarter as laid to throughout opportunity give help year. investments reinvest tax chain, to areas but can to customer called reform our investing being prices what much quarter savings U.S. where Greg. focus on out the to going go Technology quarter those and into talked forward would said a us, the from the or quarter from some so we're we've is are it the we through out grocery e-commerce we the Yes, couldn’t for in call that know so Thanks, including of those the areas lower the our throughout and you be last you can supply have quarter. serving cost you of our see about, vary rollout in priorities deliveries

Operator

proceed Credit with Our Suisse. your the with of line from next Please question. question [indiscernible] is

Unidentified Analyst

A growth. couple of up here, is on questions the first follow online

function a growth at from of in terms online stores you you If have now grocery but obviously what with in grocery ramp contribution for mass. on the online more year online the the rollout than you critical look more that the it's a seeing stores of of are

Kary Brunner

We are what with pleased we're seeing.

the a young remain mom the at providing about that customers score really her lot think kids you we net You know the in and even know just the convenience up come to customers way, within to get and of service, the on minutes order it. components we're you important really pleased five to it vehicle very out convenient her full like be and with can about her have promoter it's with who and store pick kids continued back convenience, and a talked SUV the with in high, her is grocery not are

overall about adding why this thousand a that you you we're that's If here is and vocations and then pleased approach with see we're swing a metrics the the year. the seeing and think additional strategy

Unidentified Analyst

margin been gross quarters, the then transportation the out investments the less than And the couple this were and seem right down on that if about thinking can you offsets given is Thanks. in of U.S. prior the it perhaps greater the called that last pressures you're of that on would quarters, how that the quarter that for and in than costs, of year? elaborate you so rest

Kary Brunner

the quarter years drivers over as as we opportunity kind our see comp the been you've strategies last been heard we're because annualized line. had in traffic there we've things margin that from about it we're there's Sure. of a in as gross gross and clear in you your and shifts Fourth an think I to very impact try margin us of about gross well items we within and seeing lot quarter to lot growth. number takes that talked And price of of in investment, invest with again quarter past, with to overall about number what same is talk a price the know pleased a executed strong now attention couple puts margin of from to quarter in stores that the unique an the point we like that

called Over know seen of couple pressures rate out trucking know function of transportation quarter the you overall expenses and last you've well. also you a as fuel then prices volatility somewhat market

to I in would quarters. be direct just there impacts overall So attention annualized can our some the noise your

Operator

proceed of question. [ph] with Our Selman next question your Group. is Please from Joseph Advisor with the line Chelsey

Unidentified Analyst

again to seen there through that some not, question on related presumably regional the quarter, the or we've even you quarter, One on that? trends know thoughts maybe out can you call weather were share any

Kary Brunner

saw we the West ecommerce general in in you know categories, from impacts have through you categories they pleased landed you cooler in We we're areas you weather in business certain mentioned the head-winds with more overall normalized and like about the where QX. they in apparel in stores and strong south remains some and those weather goods, in our in know think lawn from we regions business both where did April some the and analyse were see categories sporting merchandise the less as we impacted good sensitive think about business overall garden, weather the certain so we and and as have momentum

Unidentified Analyst

in they doing Is you and know that I with If again follow-up sort you could job doing positive relative of positive couple the you have to there some Is there comp guys shifting better I there Europe continue could trends. you've that guys all to because a good up success you [ph] of having something take out and to U.S.? legal had UK, conscience. figured past have the there guys extrapolate on share been quarters been but the gobble also to the something

Kary Brunner

future so you value on in we're Easter also something store make continue that overall keep we're comp we're asset UK, and global that's trajectory the right of our learnings really business some this the there improving enterprise. on If you to been call to so I shared right quarter portfolio remind as as practices across and for UK able business investing continue far our mind look steady was the benefited that business that you the price because and in but you continue progress sales the to talked earlier and that shift about at as growth best I focused to in experience that the the in we share know on and put calendar would provide

Operator

with question is line next Capital Please the Markets. KeyBanc Ed Yruma question. from your with proceed of Our

Unidentified Analyst

for on Noah is Ed. This

Easter the issues and the second experienced of the maybe weather have Just greater Thank last you you. that remediated? distribution totally and quarter then to centers confirm benefit than impact negative was related to e-commerce the

Kary Brunner

Sure.

comp April U.S. cross Easter question? merchandise And certain our on there country. temps called business there we have was in impact wouldn't weather cool your any general in second what to categories due because been out So unseasonably so

Unidentified Analyst

last Yes, Have quarter. just related been remediated? to the center those e-commerce issues distribution

Kary Brunner

assortment site the focused already. through Yes. delivering providing customers on having the experience serving the is from on and customer not and good redesign our right right our really reviews receiving on We're only site our time but also

Operator

with proceed Please your the is Parikh of Our question Oppenheimer. question. with from next line Rupesh

Rupesh Parikh

was you how doors is expectations? your how closed at I numbers if look Club, Sam's on First curious your going versus retention the

Kary Brunner

the the Yes, future Sam's quarter clubs pleased closed just see didn't the closed some we're value Club plans clearly strategically so in from that or has result fit current into there we clubs. providing the and off there our offering and we that overall our carryover some clubs and good pretty are the right focus that in know with these trade customer effectively are good strong traffic the is you clubs we in had members at and as to and a clubs on you price assortment serving have

Rupesh Parikh

provide U.S. you the second can to rates look non-grocery whether on contributor non-grocery or between And is growth at during grocery then or if we rates? a my even growth and question, any was there e-commerce more at quarter clarity you look grocery growth your the as bigger

Kary Brunner

to been pleased we've not they the important much we're tell our how omni-channel you able components contributors for pleased, as driving quantify but to deliver QX XX% that overall are targets was certainly ship with with and contributions both were each well will business. the to as going overall our Yes, year from really to online growth they're to rate. in both home we the I We're grocery

Operator

Raymond Bobby Our Griffin question next is of from James. with the line

Bobby Griffin

Sam's the in now you're actually color any stores give merchandising members with on of just guys you the sign can and kind off Club that work on putting again. what you new actually Backing closed ups stuff? been have from seeing Just the

Kary Brunner

for mean we're the as to focused this Sam's as the I both drive uptick out like sign-ups that's the in offer John I convenience are members new member good that members another just think providing providing know additional we plus that free shipping seeing and the plus members membership. as premium of value team I well and and members club plus in think you value customer more is as and things Sure on called example

ticket about you the well customer terms that experiences just it's processes, may more clubs out of well important, on simple both things this shop comp their John talk up members in and about simple thing income are making & another sign to technology get growth new it for I by in well taken to we've steps has our process for October, heard and our and in simplify traffic Scan things think customers resonating Club. have see that's in the and as the as you and even as Sam's Go allowing at leveraging and membership member been quickly as received

another overall Sam's. So for quarter good

Bobby Griffin

touched quarter upon tobacco basis through on or then it Sam's Club is answer, a on XXX we've about point full should the earlier think this from to modelling original of right. year from was we the that headwind help a impact All rest think standpoint, the And XXX us but spoken lastly got just I we guidance quarter on maybe to so based the progressing last comp? how headwinds, don’t

Kary Brunner

that guidance update you year. there Just the not on you full but an and year impacts will updating just was and next varying year metrics now could mind know so keep today, full throughout in we're in release we full be guidance our that's mind year certain quarter in that keep provide

Operator

Thank will of session today's you come conclusion conclude This We've also to participation. the for our question you. and conference. your Thank answer today.

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