Amid a tough economic scenario, Costco Wholesale Corporation (COST - Analyst Report) delivered comparable-store sales growth of 4% in April, following an equal increase in March, and reflecting comparable sales growth of 4% at its U.S. locations and 3% at international outlets.
Costco’s comparable-store sales for the 35-week period ended May 5, 2013 rose 6% buoyed by an equivalent increase at both the U.S. and international locations.
Excluding the effect of gasoline prices and foreign currency fluctuations, Costco’s comparable-store sales for April rose 6% with U.S. and international comparable-sales rising equally. For the 35-week period, the company witnessed comparable-store sales growth of 6%, with U.S. and international sales rising by a similar rate.
Total net sales for April grew 7% to $7.98 billion from $7.48 billion in the year-ago period. Costco’s sales for the 35-week period increased 9% to $69 billion from $63.59 billion in the year-ago period.
Costco was able to post healthy sales results amid challenging macroeconomic factors including higher taxes and unfavorable weather conditions that restrained consumers from spending.
Besides Costco, few other retail chains were able to navigate through this challenging economy. Clothing retailers like The TJX Companies, Inc. (TJX - Analyst Report), Ross Stores Inc. (ROST - Analyst Report) and Buckle Inc. (BKE - Snapshot Report) witnessed comps increase of 8%, 7% and 6.2%, respectively.
We believe that Costco’s differentiated product range enables it to provide an upscale shopping experience to its members, resulting in market share gains and higher sales per square foot. Moreover, it continues to maintain a healthy membership renewal rate.
Costco remains committed to opening new clubs in domestic and international markets. The company’s diversification strategy is a natural hedge against risks that may arise in specific markets.
Costco is slated to report it’s third-quarter fiscal 2013 results on May 30, 2013 and currently carries a favorable Zacks Rank #2 (Buy).