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Despite a tough consumer environment, Costco Wholesale Corp.’s (COST - Analyst Report) comparable-store sales results for January bettered analysts' expectations. The warehouse retailer delivered comparable-store sales growth of 4%, portraying an increase of 5% at the U.S. and 1% at international locations.

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

The holiday season was a tough one: while some make their way through, others struggled to lure budget-constrained consumers. Consumer spending environment was not very convincing, and bargain hunters went from one shop to another to grab the best deal. After a dismal holiday season, severe weather conditions dampened consumers’ spirits and reduced footfall at the malls. Despite these challenges, Costco emerged strong.

Other retailers which performed surprisingly well include L Brands, Inc. (LB - Analyst Report)), Walgreen Co. (WAG - Analyst Report) and The Gap, Inc. (GPS - Analyst Report) posting comparable-store sales growth of 9%, 2.9% and 1%, respectively.   

Coming to Costco, comparable-store sales for the 22-week period ended Feb 2, 2014, increased 3%, buoyed by 4% growth at the U.S. and 1% increase at international locations. Excluding the effect of gasoline prices and foreign currency fluctuations, Costco’s comparable-store sales for the period jumped 5%. Comps increased 5% at the U.S. and 7% at international locations.

Total net sales for January rose 6% to $7.99 billion from $7.51 billion in the year-ago period. Costco’s net sales for the 22-week period increased 6% to $46.32 billion from $43.77 billion in the year-ago period.

Costco currently operates 649 warehouses, comprising 462 in the United States and Puerto Rico, 87 in Canada, 33 in Mexico, 25 in the United Kingdom, 18 in Japan, 10 in Taiwan, 9 in Korea, and 5 in Australia.

Currently, Costco carries a Zacks Rank #4 (Sell), indicating lower-than-expected results in the past quarters. In the trailing four quarters, it missed the Zacks’ expectation by an average of 1.8%.

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