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Costco Sales Continue to Rise

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Costco Wholesale Corporation (COST - Free Report) delivered comparable-store sales (comps) growth of 5% in May, following an increase of 4% in April, and reflecting comparable sales growth of 5% at its U.S. locations and 6% at international outlets.

Costco’s comparable-store sales for the 39-week period ended Jun 2, 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 May rose 6%, reflecting comparable sales growth of 5% at its U.S. locations and 7% at international outlets. For the 39-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 May grew 7% to $8.13 billion from $7.57 billion in the year-ago period. Costco’s sales for the 39-week period increased 8% to $77.13 billion from $71.28 billion in the year-ago period.

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.

This Zacks Rank #3 (Hold) stock 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.

Besides Costco, other retail chains also posted healthy sales data for the month of May as improving job market, lower gas prices and rebound in the housing market boosted consumer sentiment.

Clothing chain, The Gap, Inc. (GPS - Free Report) , registered a 7% rise in comps, substantially up from the 2% increase witnessed in May 2012. Net sales jumped 11% to $1.22 billion. Leading specialty retailer of women’s intimate garments, L Brands, Inc. , marked a 3% rise in comps, whereas net sales jumped approximately 10% to $737 million in May.

The retailer of casual apparels, footwear and accessories for men and women, Buckle Inc. (BKE - Free Report) registered a 4.1% rise in comps. Net sales for May increased 4.2% to $72.8 million. 

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