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Costco (COST) Achieves Strong March Sales and Raises Dividend
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Costco Wholesale Corporation (COST - Free Report) continues to excel due to its strategic growth initiatives, effective pricing strategies and steady membership trends. These factors have propelled the company's performance, leading to strong sales figures. Additionally, Costco underscores its commitment to shareholders by announcing yet another dividend increase.
Sales Performance Overview
In March, Costco reported a significant increase in comparable sales, with 7.7% growth during the five-week period ended Apr 7, 2024. This follows consecutive increases of 5% and 2.7% in February and January, respectively. Comparable sales in the United States, Canada and Other International locations saw improvements of 7.3%, 8.9% and 8.6%, respectively.
Excluding the impacts of changes in gasoline prices and foreign exchange, comparable sales for the month under discussion rose 7.5% on improvements of 7.4%, 7.3% and 8.4% in the United States, Canada and Other International locations, respectively.
E-commerce sales also surged, marking a 28.3% increase year over year or 28%, excluding the impact of gasoline prices and foreign exchange.
Costco’s net sales increased 9.4% to $23.48 billion for the retail month of March from $21.46 billion last year. This followed an improvement of 6.9% and 4.5% witnessed in February and January, respectively.
Image Source: Zacks Investment Research
Dividend Hike
Costco has always been a favorite pick for investors seeking both steady income and growth. The company, with a strong history of dividend payments as well as sound fundamentals, provides a hedge against any odd swings in the stock market. COST’s strong cash flow generation capability has allowed it to raise dividends consistently over time.
Costco once again rewarded investors with a hike in the dividend payout. The company’s board of directors raised the quarterly dividend by 13.7% to $1.16 per share. The dividend is payable on May 10, 2024 to shareholders of record at the close of business on Apr 26, 2024. The current hike reflects a strong cash flow generation capability, driven by better execution of operating plans.
Wrapping Up
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 29.1% in the past six months compared with the Retail – Discount Stores industry’s rise of 27.9%.
3 Stocks Looking Red Hot
Here, we have highlighted three better-ranked stocks, namely Sprouts Farmers Market (SFM - Free Report) , Vital Farms (VITL - Free Report) and Grocery Outlet (GO - Free Report) .
Sprouts Farmers is engaged in the retailing of fresh, natural and organic food products. It currently sports a Zacks Rank #1 (Strong Buy). SFM has a trailing four-quarter earnings surprise of 10%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Sprouts Farmers’ current financial-year sales and earnings suggests growth of 6.7% and nearly 3.9%, respectively, from the year-ago reported numbers.
Vital Farms offers a range of produced pasture-raised foods. It currently has a Zacks Rank #2 (Buy). VITL has a trailing four-quarter earnings surprise of 155.4%, on average.
The Zacks Consensus Estimate for Vital Farms’ current financial-year sales and earnings calls for growth of 18.6% and nearly 35.6%, respectively, from the year-ago reported numbers.
Grocery Outlet, the extreme value retailer of quality, name-brand consumables and fresh products, currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for Grocery Outlet’s current financial-year sales and earnings implies growth of 9.6% and 10.3%, respectively, from the year-ago reported numbers. GO has a trailing four-quarter earnings surprise of 17%, on average.
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Costco (COST) Achieves Strong March Sales and Raises Dividend
Costco Wholesale Corporation (COST - Free Report) continues to excel due to its strategic growth initiatives, effective pricing strategies and steady membership trends. These factors have propelled the company's performance, leading to strong sales figures. Additionally, Costco underscores its commitment to shareholders by announcing yet another dividend increase.
Sales Performance Overview
In March, Costco reported a significant increase in comparable sales, with 7.7% growth during the five-week period ended Apr 7, 2024. This follows consecutive increases of 5% and 2.7% in February and January, respectively. Comparable sales in the United States, Canada and Other International locations saw improvements of 7.3%, 8.9% and 8.6%, respectively.
Excluding the impacts of changes in gasoline prices and foreign exchange, comparable sales for the month under discussion rose 7.5% on improvements of 7.4%, 7.3% and 8.4% in the United States, Canada and Other International locations, respectively.
E-commerce sales also surged, marking a 28.3% increase year over year or 28%, excluding the impact of gasoline prices and foreign exchange.
Costco’s net sales increased 9.4% to $23.48 billion for the retail month of March from $21.46 billion last year. This followed an improvement of 6.9% and 4.5% witnessed in February and January, respectively.
Image Source: Zacks Investment Research
Dividend Hike
Costco has always been a favorite pick for investors seeking both steady income and growth. The company, with a strong history of dividend payments as well as sound fundamentals, provides a hedge against any odd swings in the stock market. COST’s strong cash flow generation capability has allowed it to raise dividends consistently over time.
Costco once again rewarded investors with a hike in the dividend payout. The company’s board of directors raised the quarterly dividend by 13.7% to $1.16 per share. The dividend is payable on May 10, 2024 to shareholders of record at the close of business on Apr 26, 2024. The current hike reflects a strong cash flow generation capability, driven by better execution of operating plans.
Wrapping Up
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 29.1% in the past six months compared with the Retail – Discount Stores industry’s rise of 27.9%.
3 Stocks Looking Red Hot
Here, we have highlighted three better-ranked stocks, namely Sprouts Farmers Market (SFM - Free Report) , Vital Farms (VITL - Free Report) and Grocery Outlet (GO - Free Report) .
Sprouts Farmers is engaged in the retailing of fresh, natural and organic food products. It currently sports a Zacks Rank #1 (Strong Buy). SFM has a trailing four-quarter earnings surprise of 10%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Sprouts Farmers’ current financial-year sales and earnings suggests growth of 6.7% and nearly 3.9%, respectively, from the year-ago reported numbers.
Vital Farms offers a range of produced pasture-raised foods. It currently has a Zacks Rank #2 (Buy). VITL has a trailing four-quarter earnings surprise of 155.4%, on average.
The Zacks Consensus Estimate for Vital Farms’ current financial-year sales and earnings calls for growth of 18.6% and nearly 35.6%, respectively, from the year-ago reported numbers.
Grocery Outlet, the extreme value retailer of quality, name-brand consumables and fresh products, currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for Grocery Outlet’s current financial-year sales and earnings implies growth of 9.6% and 10.3%, respectively, from the year-ago reported numbers. GO has a trailing four-quarter earnings surprise of 17%, on average.