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Costco (COST) Thrives on Stellar Comps & E-Commerce Sales
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Costco Wholesale Corporation’s (COST - Free Report) growth strategies, better price management, decent membership trends and increasing penetration of e-commerce business have been contributing to its upbeat performance. Cumulatively, these factors have been aiding this Issaquah, WA-based company in registering impressive sales numbers.
Impressive Sales Run
Costco’s strategy to sell products at discounted prices has helped draw customers, who have been seeking both value and convenience amid the ongoing crisis. The company’s net sales increased 16.6% to $15.21 billion for the retail month of July — the four-week period ended Aug 1, 2021 — from $13.04 billion in the last year. This followed an improvement of 16.9%, 24.2% and 33.5% in the months of June, May and April, respectively.
Given the current scenario, people have been shopping more at discount stores for essentials and other discretionary purchases. Quite obviously, Costco has emerged as viable option for them. The company’s differentiated product range resonates well with customers’ spending habits.
Decent Comps Performance
Costco’s comparable sales for the month of July rose 13.8%. This followed an increase of 14.1%, 22.8% and 32.5% in the months of June, May and April, respectively. The monthly comparable sales reflect an improvement of 13.1%, 16.5% and 14.4% in the United States, Canada and Other International locations, respectively.
Excluding the impacts from change in gasoline prices and foreign exchange, comparable sales for the month under discussion rose 8% on an improvement of 8.5%, 5.5% and 7.8% in the United States, Canada and Other International locations, respectively.
Image Source: Zacks Investment Research
E-Commerce Sales Rise
Costco has been rapidly adopting the omni-channel mantra to provide a seamless shopping experience, whether online or at stores. The company’s acquisition of Innovel Solutions, a leading provider of third-party end-to-end logistics solutions, — now called Costco Logistics — has boosted its e-commerce capabilities and facilitates it to sell "big and bulky" items.
Last month, Costco in collaboration with Uber Technologies launched grocery delivery pilot in 25 locations across Texas. This allows members to get their on-demand grocery delivery within hours with Uber and Uber Eats mobile apps. The minimum order value is $35, while the Uber Pass and Eats Pass holders can avail free delivery.
We note that e-commerce comparable sales rose 7.4% during the month of July. This followed an increase of 20.8%, 12.1% and 20.5% in the months of June, May and April, respectively. Costco operates e-commerce sites in the United States, Canada, the U.K., Mexico, Korea, Taiwan, Japan and Australia.
Wrapping Up
Costco continues to be one of the dominant warehouse retailers based on the expanse and quality of merchandise offered. It is focused on ramping up investments in the wake of rising competition from the likes of Dollar Tree (DLTR - Free Report) , Dollar General (DG - Free Report) and Target (TGT - Free Report) . We believe that the company’s business model and commitment toward opening membership warehouses will continue to drive traffic.
Image: Bigstock
Costco (COST) Thrives on Stellar Comps & E-Commerce Sales
Costco Wholesale Corporation’s (COST - Free Report) growth strategies, better price management, decent membership trends and increasing penetration of e-commerce business have been contributing to its upbeat performance. Cumulatively, these factors have been aiding this Issaquah, WA-based company in registering impressive sales numbers.
Impressive Sales Run
Costco’s strategy to sell products at discounted prices has helped draw customers, who have been seeking both value and convenience amid the ongoing crisis. The company’s net sales increased 16.6% to $15.21 billion for the retail month of July — the four-week period ended Aug 1, 2021 — from $13.04 billion in the last year. This followed an improvement of 16.9%, 24.2% and 33.5% in the months of June, May and April, respectively.
Given the current scenario, people have been shopping more at discount stores for essentials and other discretionary purchases. Quite obviously, Costco has emerged as viable option for them. The company’s differentiated product range resonates well with customers’ spending habits.
Decent Comps Performance
Costco’s comparable sales for the month of July rose 13.8%. This followed an increase of 14.1%, 22.8% and 32.5% in the months of June, May and April, respectively. The monthly comparable sales reflect an improvement of 13.1%, 16.5% and 14.4% in the United States, Canada and Other International locations, respectively.
Excluding the impacts from change in gasoline prices and foreign exchange, comparable sales for the month under discussion rose 8% on an improvement of 8.5%, 5.5% and 7.8% in the United States, Canada and Other International locations, respectively.
Image Source: Zacks Investment Research
E-Commerce Sales Rise
Costco has been rapidly adopting the omni-channel mantra to provide a seamless shopping experience, whether online or at stores. The company’s acquisition of Innovel Solutions, a leading provider of third-party end-to-end logistics solutions, — now called Costco Logistics — has boosted its e-commerce capabilities and facilitates it to sell "big and bulky" items.
Last month, Costco in collaboration with Uber Technologies launched grocery delivery pilot in 25 locations across Texas. This allows members to get their on-demand grocery delivery within hours with Uber and Uber Eats mobile apps. The minimum order value is $35, while the Uber Pass and Eats Pass holders can avail free delivery.
We note that e-commerce comparable sales rose 7.4% during the month of July. This followed an increase of 20.8%, 12.1% and 20.5% in the months of June, May and April, respectively. Costco operates e-commerce sites in the United States, Canada, the U.K., Mexico, Korea, Taiwan, Japan and Australia.
Wrapping Up
Costco continues to be one of the dominant warehouse retailers based on the expanse and quality of merchandise offered. It is focused on ramping up investments in the wake of rising competition from the likes of Dollar Tree (DLTR - Free Report) , Dollar General (DG - Free Report) and Target (TGT - Free Report) . We believe that the company’s business model and commitment toward opening membership warehouses will continue to drive traffic.
We also note that shares of this Zacks Rank #3 (Hold) company have appreciated approximately 19.3% in the past three months compared with the industry’s growth of 13.1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.