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Despite a challenging environment, Costco Wholesale Corporation (COST - Analyst Report) came up with healthy sales report for August. Costco delivered comparable-store sales (comps) growth of 4% that surpassed analysts’ expectations. Comps increased 4% at U.S. and 2% at international locations.

Excluding the effect of gasoline prices and foreign currency fluctuations, Costco’s comparable-store sales for August rose 6%, reflecting comparable sales growth of 5% at its U.S. locations and 8% at international outlets. 

On the whole, retailers came up with mixed sales results for August. The month got off to a slow start and the shift in consumers’ shopping preferences toward big-ticket items hurt sales of apparel, shoes and accessories. However, sales picked up later as retailers spent more on promotions and came up with lucrative discounts to drive traffic. However, heavy discounts raise concerns about margins.

Apparel retailer, Stein Mart Inc , impressed analysts by posting a 3.8% rise in comps, while The Gap, Inc. (GPS - Analyst Report), witnessed a 2% increase in comps. However, discount store operator, Fred's, Inc. (FRED - Analyst Report), reported flat comps for the month of August.

Comparable-store sales for the fourth quarter of fiscal 2013 increased 5%, buoyed by 5% growth at U.S. and 4% increase at international locations. Excluding the effect of gasoline prices and foreign currency fluctuations, Costco’s comparable-store sales for the fourth quarter witnessed growth of 5%. Comps increased 5% at U.S. and 7% at international locations.

Total net sales for August rose 7% to $7.95 billion from $7.44 billion in the year-ago period. Costco’s net sales for the fourth quarter increased 1% to $31.8 billion from $31.5 billion in the year-ago period.

Currently, Costco holds a Zacks Rank #4 (Sell).

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