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Costco (COST) Witnesses a Drop in Comparable Sales in June
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Costco Wholesale Corporation (COST - Free Report) failed to meet investors’ expectations once again as its sales performance disappointed. June represented the second consecutive month in which comparable sales experienced a decline.
June Sales Disappoint
Costco’s net sales increased 0.4% to $22.86 billion for the retail month of June from $22.78 billion last year. However, the rate of growth decelerated from the improvement of 1.2% and 3% witnessed in May and April, respectively.
Comparable sales for the retail month of June — the five-week period ended Jul 2, 2023 — declined 1.4%. This followed a drop of 0.3% registered in May. Comparable sales for June reflected a decrease of 2.5% in the United States and 0.6% in Canada but an increase of 4.5% in Other International locations, respectively.
Image Source: Zacks Investment Research
Excluding the impacts of changes in gasoline prices and foreign exchange, comparable sales for the month under discussion rose 3% on improvements of 2%, 6.5% and 5.1% in the United States, Canada and Other International locations, respectively.
We note that Costco’s comparable e-commerce sales fell 0.7% year over year. Excluding the impact of gasoline prices and foreign exchange, the same declined 0.4% year over year.
Conclusion
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 12.2% in the past six months against the Retail – Discount Stores industry’s decline of 0.3%.
Nomad Foods, a frozen food product company, currently sports a Zacks Rank #1 (Strong Buy). NOMD has a trailing four-quarter earnings surprise of 8.5%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Nomad Foods’ current fiscal-year sales suggests growth of around 8% from the year-ago reported figures.
Celsius Holdings, which offers functional drinks and liquid supplements, currently sports a Zacks Rank #1. CELH delivered an earnings surprise of 81.8% in the last reported quarter.
The Zacks Consensus Estimate for Celsius Holdings’ current fiscal-year sales and earnings suggests growth of 69.6% and 154.4%, respectively, from the year-ago reported numbers.
Walmart, which operates a chain of hypermarkets, discount department stores and grocery stores, currently carries a Zacks Rank #2 (Buy). The expected EPS growth rate for three to five years is 5.5%.
The Zacks Consensus Estimate for Walmart’s current financial-year sales suggests growth of 4.2% from the year-ago period. WMT has a trailing four-quarter earnings surprise of 12%, on average.
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Costco (COST) Witnesses a Drop in Comparable Sales in June
Costco Wholesale Corporation (COST - Free Report) failed to meet investors’ expectations once again as its sales performance disappointed. June represented the second consecutive month in which comparable sales experienced a decline.
June Sales Disappoint
Costco’s net sales increased 0.4% to $22.86 billion for the retail month of June from $22.78 billion last year. However, the rate of growth decelerated from the improvement of 1.2% and 3% witnessed in May and April, respectively.
Comparable sales for the retail month of June — the five-week period ended Jul 2, 2023 — declined 1.4%. This followed a drop of 0.3% registered in May. Comparable sales for June reflected a decrease of 2.5% in the United States and 0.6% in Canada but an increase of 4.5% in Other International locations, respectively.
Image Source: Zacks Investment Research
Excluding the impacts of changes in gasoline prices and foreign exchange, comparable sales for the month under discussion rose 3% on improvements of 2%, 6.5% and 5.1% in the United States, Canada and Other International locations, respectively.
We note that Costco’s comparable e-commerce sales fell 0.7% year over year. Excluding the impact of gasoline prices and foreign exchange, the same declined 0.4% year over year.
Conclusion
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 12.2% in the past six months against the Retail – Discount Stores industry’s decline of 0.3%.
Bet Your Bucks on These 3 Hot Stocks
Here we have highlighted three better-ranked stocks, namely Nomad Foods (NOMD - Free Report) , Celsius Holdings (CELH - Free Report) and Walmart (WMT - Free Report) .
Nomad Foods, a frozen food product company, currently sports a Zacks Rank #1 (Strong Buy). NOMD has a trailing four-quarter earnings surprise of 8.5%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Nomad Foods’ current fiscal-year sales suggests growth of around 8% from the year-ago reported figures.
Celsius Holdings, which offers functional drinks and liquid supplements, currently sports a Zacks Rank #1. CELH delivered an earnings surprise of 81.8% in the last reported quarter.
The Zacks Consensus Estimate for Celsius Holdings’ current fiscal-year sales and earnings suggests growth of 69.6% and 154.4%, respectively, from the year-ago reported numbers.
Walmart, which operates a chain of hypermarkets, discount department stores and grocery stores, currently carries a Zacks Rank #2 (Buy). The expected EPS growth rate for three to five years is 5.5%.
The Zacks Consensus Estimate for Walmart’s current financial-year sales suggests growth of 4.2% from the year-ago period. WMT has a trailing four-quarter earnings surprise of 12%, on average.