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Costco's (COST) Stellar Comparable Sales Run Continues in May
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Costco Wholesale Corporation (COST - Free Report) has time and again proved its mettle. The company has weathered multiple market gyrations and still delivered returns to investors. Strategic investments, a customer-centric approach, merchandise initiatives and emphasis on memberships have been the discount retailer’s primary strengths. These have helped post consistent sales growth.
Impressively, Costco has outpaced the Retail - Discount Stores industry in the past year. We note that shares of this Zacks Rank #3 (Hold) company have appreciated 25.8% in the past year against the industry’s decline of 2.7%.
Stellar Sales Run
Costco’s growth strategies, better price management, decent membership trends and increasing penetration of e-commerce business have been contributing to its upbeat performance. Amid the surging inflation, low-to-middle income consumers have preferred discount stores to meet their day-to-day needs. Cumulatively, these have been aiding this Issaquah, WA-based company in registering impressive sales numbers.
Costco’s net sales increased 16.9% to $18.23 billion for the retail month of May, the four-week period ended May 29, 2022, from $15.59 billion in the last year. This followed an increase of 13.9% in April and 18.7% in March.
Image Source: Zacks Investment Research
Impressive Comparable Sales Trend
Comparable sales for the retail month of May jumped 15.5%. This followed increases of 12.6% and 17.2% in April and March, respectively. Comparable sales for the retail month of May reflect an improvement of 17.5%, 17.4% and 2.6% in the United States, Canada and Other International locations, respectively.
Excluding the impacts of changes in gasoline prices and foreign exchange, comparable sales for the month under discussion rose 11.8% on improvements of 10.7%, 19.5% and 10.1% in the United States, Canada and Other International locations, respectively.
E-Commerce on the Rise
Costco has been rapidly adopting the omni-channel mantra in a bid to provide a seamless shopping experience, both online and at stores. The company has been gradually expanding its e-commerce capabilities in the United States, Canada, the U.K., Mexico, Korea, Taiwan, Japan and Australia.
We note that comparable e-commerce sales rose 6.3% in May. This followed increases of 5.7% and 8.9% in April and March, respectively. Costco Logistics has bolstered e-commerce capabilities and facilitated the selling of “big and bulky” items.
Bottom Line
Costco continues to be one of the dominant warehouse retailers based on the expanse and quality of merchandise offered. The company's distinctive membership business model sets it apart from the traditional players. A favorable product mix, steady store traffic, pricing power and strong liquidity position should help Costco keep outperforming.
The discount retailer Dollar Tree currently sports a Zacks Rank #1 (Strong Buy). DLTR has an expected EPS growth rate of 15.5% for three-five years. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Dollar Tree’s current financial-year sales and EPS suggests growth of 6.7% and 40.3%, respectively, from the corresponding year-ago period’s levels. DLTR has a trailing four-quarter earnings surprise of 13.1%, on average.
Boot Barn Holdings, a lifestyle retailer of western and work-related footwear, apparel and accessories, flaunts a Zacks Rank #1. BOOT has an expected EPS growth rate of 20% for three-five years.
The Zacks Consensus Estimate for Boot Barn Holdings’ current financial year sales and EPS suggests growth of 17% and 4.4%, respectively, from the year-ago period.
Kroger, the renowned grocery retailer, carries a Zacks Rank #2 (Buy) at present. The company has an expected EPS growth rate of 9.9% for three-five years.
The Zacks Consensus Estimate for Kroger’s current financial-year sales and EPS suggests growth of 3.2% and 4.1%, respectively, from the year-ago reported number. KR has a trailing four-quarter earnings surprise of 22.1%, on average.
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Costco's (COST) Stellar Comparable Sales Run Continues in May
Costco Wholesale Corporation (COST - Free Report) has time and again proved its mettle. The company has weathered multiple market gyrations and still delivered returns to investors. Strategic investments, a customer-centric approach, merchandise initiatives and emphasis on memberships have been the discount retailer’s primary strengths. These have helped post consistent sales growth.
Impressively, Costco has outpaced the Retail - Discount Stores industry in the past year. We note that shares of this Zacks Rank #3 (Hold) company have appreciated 25.8% in the past year against the industry’s decline of 2.7%.
Stellar Sales Run
Costco’s growth strategies, better price management, decent membership trends and increasing penetration of e-commerce business have been contributing to its upbeat performance. Amid the surging inflation, low-to-middle income consumers have preferred discount stores to meet their day-to-day needs. Cumulatively, these have been aiding this Issaquah, WA-based company in registering impressive sales numbers.
Costco’s net sales increased 16.9% to $18.23 billion for the retail month of May, the four-week period ended May 29, 2022, from $15.59 billion in the last year. This followed an increase of 13.9% in April and 18.7% in March.
Image Source: Zacks Investment Research
Impressive Comparable Sales Trend
Comparable sales for the retail month of May jumped 15.5%. This followed increases of 12.6% and 17.2% in April and March, respectively. Comparable sales for the retail month of May reflect an improvement of 17.5%, 17.4% and 2.6% in the United States, Canada and Other International locations, respectively.
Excluding the impacts of changes in gasoline prices and foreign exchange, comparable sales for the month under discussion rose 11.8% on improvements of 10.7%, 19.5% and 10.1% in the United States, Canada and Other International locations, respectively.
E-Commerce on the Rise
Costco has been rapidly adopting the omni-channel mantra in a bid to provide a seamless shopping experience, both online and at stores. The company has been gradually expanding its e-commerce capabilities in the United States, Canada, the U.K., Mexico, Korea, Taiwan, Japan and Australia.
We note that comparable e-commerce sales rose 6.3% in May. This followed increases of 5.7% and 8.9% in April and March, respectively. Costco Logistics has bolstered e-commerce capabilities and facilitated the selling of “big and bulky” items.
Bottom Line
Costco continues to be one of the dominant warehouse retailers based on the expanse and quality of merchandise offered. The company's distinctive membership business model sets it apart from the traditional players. A favorable product mix, steady store traffic, pricing power and strong liquidity position should help Costco keep outperforming.
3 Stocks Looking Red Hot
Here we highlight three better-ranked stocks, namely, Dollar Tree (DLTR - Free Report) , Boot Barn Holdings (BOOT - Free Report) and Kroger (KR - Free Report) .
The discount retailer Dollar Tree currently sports a Zacks Rank #1 (Strong Buy). DLTR has an expected EPS growth rate of 15.5% for three-five years. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Dollar Tree’s current financial-year sales and EPS suggests growth of 6.7% and 40.3%, respectively, from the corresponding year-ago period’s levels. DLTR has a trailing four-quarter earnings surprise of 13.1%, on average.
Boot Barn Holdings, a lifestyle retailer of western and work-related footwear, apparel and accessories, flaunts a Zacks Rank #1. BOOT has an expected EPS growth rate of 20% for three-five years.
The Zacks Consensus Estimate for Boot Barn Holdings’ current financial year sales and EPS suggests growth of 17% and 4.4%, respectively, from the year-ago period.
Kroger, the renowned grocery retailer, carries a Zacks Rank #2 (Buy) at present. The company has an expected EPS growth rate of 9.9% for three-five years.
The Zacks Consensus Estimate for Kroger’s current financial-year sales and EPS suggests growth of 3.2% and 4.1%, respectively, from the year-ago reported number. KR has a trailing four-quarter earnings surprise of 22.1%, on average.