Shares of Costco Wholesale Corporation (COST - Free Report) declined roughly 2% during the after-market trading session on Apr 5. The softness in monthly sales numbers alarmed investors. Consumers pulled back on spending as inflation and a high-interest rate environment discomforted the family budget.
March Sales Disappoint
Costco’s net sales increased a meager 0.5% to $21.71 billion for the retail month of March from $21.61 billion last year. The rate of growth declined significantly from the improvements of 4.7% and 6.9% witnessed in February and January, respectively.
Comparable sales for the retail month of March — the five-week period ended Apr 2, 2023 — declined 1.1%. This showed a sharp deceleration from the increases of 3.5% and 5.6% registered in February and January, respectively.
Comparable sales for March reflect a decline of 1.5% and 2.4% in the United States and Canada, respectively, but an increase of 2% in Other International locations, respectively.
Excluding the impacts of changes in gasoline prices and foreign exchange, comparable sales for the month under discussion rose 2.6% on improvements of 0.9%, 7.4% and 7.6% in the United States, Canada and Other International locations, respectively.
We note that Costco’s comparable e-commerce sales fell 12.7% year over year. Excluding the impact of gasoline prices and foreign exchange, the same declined 11.6% year over year.
Bottom Line
One of the widely recognized names in the industry, Costco has been providing its members with quality goods and services. The company, which is among the biggest winners amid the pandemic, sells products at discounted prices to draw customers, who have been seeking both value and convenience. However, being a consumer-centric company, the warehouse retailer is not fully immune to headwinds impacting consumers’ spending activity.
We note that shares of this Zacks Rank #3 (Hold) company have risen 6.2% in the past six months compared with the Retail – Discount Stores industry’s growth of 9.6%.
3 Picks You Can’t Miss Out On
Here we have highlighted three better-ranked stocks, namely Kroger (KR - Free Report) , BJ's Wholesale Club (BJ - Free Report) and General Mills (GIS - Free Report) .
Kroger, which operates as a supermarket operator, currently sports a Zacks Rank #1 (Strong Buy). The expected EPS growth rate for three to five years is 6%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Kroger’s current financial-year revenues and EPS suggests growth of 2.5% and 6.2%, respectively, from the year-ago reported figure. Kroger has a trailing four-quarter earnings surprise of 9.8%, on average.
BJ's Wholesale Club, which operates warehouse clubs, carries a Zacks Rank #2 (Buy). The expected EPS growth rate for three to five years is 9.3%.
The Zacks Consensus Estimate for BJ's Wholesale Club’s current financial-year sales and earnings suggests growth of 7.3% and 0.8% from the year-ago period. BJ has a trailing four-quarter earnings surprise of 19.6%, on average.
General Mills, which manufactures and markets branded consumer foods, currently carries a Zacks Rank #2. The expected EPS growth rate for three to five years is 7.5%.
The Zacks Consensus Estimate for General Mills’ current financial-year sales and earnings suggests growth of 5.9% and 7.1% from the year-ago period. GIS has a trailing four-quarter earnings surprise of 8.1%, on average.
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Shares of Costco Wholesale Corporation (COST - Free Report) declined roughly 2% during the after-market trading session on Apr 5. The softness in monthly sales numbers alarmed investors. Consumers pulled back on spending as inflation and a high-interest rate environment discomforted the family budget.
March Sales Disappoint
Costco’s net sales increased a meager 0.5% to $21.71 billion for the retail month of March from $21.61 billion last year. The rate of growth declined significantly from the improvements of 4.7% and 6.9% witnessed in February and January, respectively.
Comparable sales for the retail month of March — the five-week period ended Apr 2, 2023 — declined 1.1%. This showed a sharp deceleration from the increases of 3.5% and 5.6% registered in February and January, respectively.
Comparable sales for March reflect a decline of 1.5% and 2.4% in the United States and Canada, respectively, but an increase of 2% in Other International locations, respectively.
Excluding the impacts of changes in gasoline prices and foreign exchange, comparable sales for the month under discussion rose 2.6% on improvements of 0.9%, 7.4% and 7.6% in the United States, Canada and Other International locations, respectively.
We note that Costco’s comparable e-commerce sales fell 12.7% year over year. Excluding the impact of gasoline prices and foreign exchange, the same declined 11.6% year over year.
Bottom Line
One of the widely recognized names in the industry, Costco has been providing its members with quality goods and services. The company, which is among the biggest winners amid the pandemic, sells products at discounted prices to draw customers, who have been seeking both value and convenience. However, being a consumer-centric company, the warehouse retailer is not fully immune to headwinds impacting consumers’ spending activity.
We note that shares of this Zacks Rank #3 (Hold) company have risen 6.2% in the past six months compared with the Retail – Discount Stores industry’s growth of 9.6%.
3 Picks You Can’t Miss Out On
Here we have highlighted three better-ranked stocks, namely Kroger (KR - Free Report) , BJ's Wholesale Club (BJ - Free Report) and General Mills (GIS - Free Report) .
Kroger, which operates as a supermarket operator, currently sports a Zacks Rank #1 (Strong Buy). The expected EPS growth rate for three to five years is 6%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Kroger’s current financial-year revenues and EPS suggests growth of 2.5% and 6.2%, respectively, from the year-ago reported figure. Kroger has a trailing four-quarter earnings surprise of 9.8%, on average.
BJ's Wholesale Club, which operates warehouse clubs, carries a Zacks Rank #2 (Buy). The expected EPS growth rate for three to five years is 9.3%.
The Zacks Consensus Estimate for BJ's Wholesale Club’s current financial-year sales and earnings suggests growth of 7.3% and 0.8% from the year-ago period. BJ has a trailing four-quarter earnings surprise of 19.6%, on average.
General Mills, which manufactures and markets branded consumer foods, currently carries a Zacks Rank #2. The expected EPS growth rate for three to five years is 7.5%.
The Zacks Consensus Estimate for General Mills’ current financial-year sales and earnings suggests growth of 5.9% and 7.1% from the year-ago period. GIS has a trailing four-quarter earnings surprise of 8.1%, on average.
Free Report – The Bitcoin Profit Phenomenon
Zacks Investment Research has released a Special Report to help you pursue massive profits from the world’s first and largest decentralized form of money.
No guarantees for the future, but in the past three presidential election years, Bitcoin’s returns were as follows: 2012 +272.4%, 2016 +161.1%, and 2020 +302.8%.
Zacks predicts another significant surge. Click below for Bitcoin: A Tumultuous Yet Resilient History.
Download Now – Today It’s FREE >>
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