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Costco's (COST) Comparable Sales Display Strength in August
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Costco Wholesale Corporation’s (COST - Free Report) growth strategies, better price management and decent membership trends have been contributing to its performance. Cumulatively, these factors have been aiding this Issaquah, WA-based company in registering decent sales numbers. Markedly, comparable sales continued to display strength in August.
August Witnesses Decent Sales Performance
Costco’s net sales increased 5% to $18.42 billion for the retail month of August from $17.55 billion last year. This followed an improvement of 4.5% witnessed in July.
Comparable sales for the retail month of August — the four-week period ended Aug 27, 2023 — increased 3.4%. This followed an increase of 2.5% registered in July. Comparable sales for August reflect an improvement of 2.8%, 3% and 7.3% 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 4.1% on improvements of 3.2%, 7.5% and 5.4% in the United States, Canada and Other International locations, respectively.
We note that Costco’s comparable e-commerce sales decreased 2.5% year over year. Excluding the impact of gasoline prices and foreign exchange, the metric declined 2.2% year over year.
Image Source: Zacks Investment Research
Membership Model Fuels Retail Success
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 and pricing power set it apart from traditional players. Membership fees increased 6.1% to $1,044 million in the third quarter of fiscal 2023. Costco ended the quarter with 69.1 million paid household members and 124.7 million cardholders.
Through a calculated approach that involves identifying untapped markets and tailoring offerings to meet customer preferences, Costco has managed to deepen its roots. This retail bellwether has been steadily expanding its footprint through new club openings in the domestic and international markets. Costco also operates e-commerce sites in the United States, Canada, the U.K., Mexico, Korea, Taiwan, Japan and Australia.
We believe a favorable product mix, membership growth, pricing power and strong liquidity should benefit Costco. Shares of this Zacks Rank #3 (Hold) company have advanced 12.6% in the past six months compared with the Retail – Discount Stores industry’s rise of 0.1%.
Grocery Outlet, an extreme value retailer of quality, name-brand consumables and fresh products, currently has a Zacks Rank #2 (Buy). The expected EPS growth rate for three to five years is 12.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Grocery Outlet’s current financial-year sales and earnings suggests growth of 11.2% and 3.9%, respectively, from the year-ago reported numbers. GO has a trailing four-quarter earnings surprise of 14.3%, on average.
Ross Stores, which operates off-price retail apparel and home fashion stores, currently carries a Zacks Rank #2. The expected EPS growth rate for three to five years is 11.6%.
The Zacks Consensus Estimate for Ross Stores’ current financial-year sales and earnings suggests growth of 7% and 19.4%, respectively, from the year-ago reported numbers. ROST has a trailing four-quarter earnings surprise of 11.4%, on average.
Walmart, which operates a chain of hypermarkets, discount department stores and grocery stores, currently carries a Zacks Rank #2. The expected EPS growth rate for three to five years is 6.6%.
The Zacks Consensus Estimate for Walmart’s current financial-year sales and earnings suggests growth of 5% and 2.1%, respectively, from the year-ago reported numbers. WMT has a trailing four-quarter earnings surprise of 11.6%, on average.
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Costco's (COST) Comparable Sales Display Strength in August
Costco Wholesale Corporation’s (COST - Free Report) growth strategies, better price management and decent membership trends have been contributing to its performance. Cumulatively, these factors have been aiding this Issaquah, WA-based company in registering decent sales numbers. Markedly, comparable sales continued to display strength in August.
August Witnesses Decent Sales Performance
Costco’s net sales increased 5% to $18.42 billion for the retail month of August from $17.55 billion last year. This followed an improvement of 4.5% witnessed in July.
Comparable sales for the retail month of August — the four-week period ended Aug 27, 2023 — increased 3.4%. This followed an increase of 2.5% registered in July. Comparable sales for August reflect an improvement of 2.8%, 3% and 7.3% 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 4.1% on improvements of 3.2%, 7.5% and 5.4% in the United States, Canada and Other International locations, respectively.
We note that Costco’s comparable e-commerce sales decreased 2.5% year over year. Excluding the impact of gasoline prices and foreign exchange, the metric declined 2.2% year over year.
Image Source: Zacks Investment Research
Membership Model Fuels Retail Success
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 and pricing power set it apart from traditional players. Membership fees increased 6.1% to $1,044 million in the third quarter of fiscal 2023. Costco ended the quarter with 69.1 million paid household members and 124.7 million cardholders.
Through a calculated approach that involves identifying untapped markets and tailoring offerings to meet customer preferences, Costco has managed to deepen its roots. This retail bellwether has been steadily expanding its footprint through new club openings in the domestic and international markets. Costco also operates e-commerce sites in the United States, Canada, the U.K., Mexico, Korea, Taiwan, Japan and Australia.
We believe a favorable product mix, membership growth, pricing power and strong liquidity should benefit Costco. Shares of this Zacks Rank #3 (Hold) company have advanced 12.6% in the past six months compared with the Retail – Discount Stores industry’s rise of 0.1%.
Bet Your Bucks on These 3 Hot Stocks
Here we have highlighted three better-ranked stocks, namely Grocery Outlet (GO - Free Report) , Ross Stores (ROST - Free Report) and Walmart (WMT - Free Report) .
Grocery Outlet, an extreme value retailer of quality, name-brand consumables and fresh products, currently has a Zacks Rank #2 (Buy). The expected EPS growth rate for three to five years is 12.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Grocery Outlet’s current financial-year sales and earnings suggests growth of 11.2% and 3.9%, respectively, from the year-ago reported numbers. GO has a trailing four-quarter earnings surprise of 14.3%, on average.
Ross Stores, which operates off-price retail apparel and home fashion stores, currently carries a Zacks Rank #2. The expected EPS growth rate for three to five years is 11.6%.
The Zacks Consensus Estimate for Ross Stores’ current financial-year sales and earnings suggests growth of 7% and 19.4%, respectively, from the year-ago reported numbers. ROST has a trailing four-quarter earnings surprise of 11.4%, on average.
Walmart, which operates a chain of hypermarkets, discount department stores and grocery stores, currently carries a Zacks Rank #2. The expected EPS growth rate for three to five years is 6.6%.
The Zacks Consensus Estimate for Walmart’s current financial-year sales and earnings suggests growth of 5% and 2.1%, respectively, from the year-ago reported numbers. WMT has a trailing four-quarter earnings surprise of 11.6%, on average.