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© Rogelio V. Solis/AP; John Greim/LightRocket via Getty Images Store associate at Sam's Club in Jackson, Miss.; Costco store in Mount Laurel, N.J.

(Bloomberg) - Sam’s Club, the warehouse division of Wal- Mart Stores Inc., posted its worst first-quarter sales in years, a sign it’s falling further behind Costco Wholesale Corp. in winning the hearts of America’s bulk shoppers.

After dropping 3 percent last quarter, Sam’s Club revenue is now at its lowest level in three years. While same-store sales inched up 0.4 percent when fuel is excluded, that missed analysts’ estimates for a 1.6 percent increase. Costco, meanwhile, saw growth of 8 percent on that basis in its most recent results.

Wal-Mart is struggling to attract customers to the warehouse chain, in part because of a less appealing assortment of products, said Brian Yarbrough, an analyst at Edward Jones in St. Louis. Sam’s Club also has lower-income clientele. Even though Costco built its reputation on cheap prices, it draws plenty of upscale shoppers and small-business owners.

“It’s a stunning difference between Sam’s and Costco, ” Yarbrough said in an interview.

The retail economy’s stop-and-go recovery has put more of a spotlight on the discrepancies between the two chains. Costco shoppers have continued to spend, while Sam’s less affluent customers are holding back, said Yarbrough, who has a neutral rating on the shares of both companies.

Net sales at Sam’s Club fell to $13.5 billion last quarter, with operating income declining 11 percent, Bentonville, Arkansas-based Wal-Mart said Tuesday. Costco’s sales grew 4.4 percent to $27.5 billion in the period ended Feb. 15. The Issaquah, Washington-based company reports its latest quarterly numbers next week.

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Costco has built a following for its Kirkland Signature private-label products - everything from handbags to hearing aids - and they account for about 20 percent of the items sold by the chain. Sam’s has failed to generate the same level of interest with its store brands, Yarbrough said.

Rosalind Brewer, the head of Sam’s Club, said Tuesday that improving merchandise assortment was a key focus for the chain. That includes adding more organic-food offerings this year.

“Our merchant teams continue to work on bringing newness and trend-right merchandise into the clubs, ” Brewer said. “We still have opportunities for improvement.”

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