Back to top

Costco Posts Solid Comps Again, September Metric Up 8.4%

Read MoreHide Full Article

Costco Wholesale Corporation (COST - Free Report) continues to be one of the dominant retail wholesalers based on the range and quality of merchandise offered. Moreover, the company’s robust growth strategies, price management efforts, strong membership trends and increasing penetration of e-commerce business helps to create a niche position in the evolving retail ecosystem.  Markedly, these aspects have helped the company to continue with its impressive comparable sales (comps) run.

In September, comps rose 8.4% following an increase of 9.2%, 8.3%, 9.7%, 11.7%,10.9%, 8.6%,10.5% and 6% in August, July, June, May, April, March, February and January, respectively.

Comps for September reflects an increase of 10.4%, 2.9% and 4.3% at the United States, Canada and Other International locations, respectively. Excluding the impact of foreign currency fluctuations and gasoline prices, comps for the month rose 7.3%, while the same increased 7.7%, 6.4% and 6.2% at the United States, Canada and Other International locations, respectively.

Notably, the company generated net sales of $13.6 billion in September, up 10.3% year over year. Meanwhile, net sales improved a respective 12.2%, 10.1%, 11.7%, 14.1%, 13.1%, 10.9%, 12.8% and 8.4% in August, July, June, May, April, March, February and January.

The robust sales trend indicates that Costco is somewhat unfazed by the tough retail scenario. While major chains are grappling with sluggish store and mall traffic as consumers switch to online shopping, this Issaquah, WA-based company seems rather resilient to the challenging retail backdrop. Undoubtedly the company’s well-chalked endeavors to keep consumers interested in its offerings have been yielding well. Moreover, improving job prospects, rising disposable income and upsurge in consumer confidence have been aiding this discount retailer’s performance.

Further, we note that e-commerce comparable sales advanced 28.6% in September and 26.2% during the final quarter of fiscal 2018. Backed by robust delivery services and effective merchandising, Costco has been witnessing steady growth in its online platform. With the wave of digital transformation hitting the sector, retailers are fast adopting the omni-channel mantra to provide a seamless shopping experience, whether online or in-stores. Costco, which shares space with Walmart (WMT - Free Report) , Target (TGT - Free Report) and Ross Stores (ROST - Free Report) , is no exception to this trend, and has been constantly exploring opportunities to augment its strength in the online realm.


 

The afore-mentioned factors have helped this Zacks Rank #3 (Hold) stock climb roughly 41% in a year, comfortably outperforming the industry’s and Retail-Wholesale sector that advanced approximately 39% and 18%, respectively. Currently, the stock is trading close to its 52-week high of $221.05, and there are valid reasons to believe that Costco with a Growth Score of A and long-term earnings growth rate of 10.2% could scale new highs. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Currently, Costco operates 763 warehouses, covering 528 in the United States and Puerto Rico, 100 in Canada, 39 in Mexico, 28 in the U.K., 26 in Japan, 15 in Korea, 13 in Taiwan, 10 in Australia, two in Spain, one in Iceland and one in France.

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.      

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.   

See the pot trades we're targeting>>



More from Zacks Analyst Blog

You May Like