Costco Wholesale Corporation’s (COST - Free Report) better price management, strong membership trends and increasing penetration of e-commerce business have played a crucial role in its decent comparable sales (comps) run. Moreover, favorable job picture, rising wages and improved consumer sentiment are other important factors aiding the same.
Management had previously anticipated that sales are likely to be hit owing to Lunar New Year occurring 11 days ahead this year as compared with last year. This has been reflected in February’s total sales and Other International sales, which were negatively impacted by approximately 0.5% and 4.5%, respectively. In spite of this, the operator of membership warehouses managed to score decent numbers for the month of February.
The metric increased 3.5% for the four-week ended Mar 3, 2019. This follows an increase of 5.2% in January, 6.1% in December and 9.2% in November. Comps for February reflect an increase of 6% in the United States but a decline of 5.9% in Other International locations, respectively, and flat comps in Canada.
Excluding the impact of foreign currency fluctuations, gasoline prices and accounting change concerning revenue recognition (ASC 606), comps for the month rose 4.6%, while the same increased 5.7% and 4.8% in the United States and Canada, respectively, but declined 1.2% in Other International locations.
Meanwhile, net sales improved 5% to $10.72 billion in the month under review, following an increase of 8%, 7.8% and 9.8% in January, December and November, respectively.
For the 26 weeks ended Mar 3, 2019, net sales came in at $74.42 billion, up about 8.6% from $68.51 billion reported in the year-ago period. Comps for the period grew 6.9%, while the same increased 9%, 1.1% and 2.3% in the United States, Canada and Other International locations, respectively.
Costco is also steadily expanding e-commerce capabilities in the United States, Canada, the U.K., Mexico, Korea and Taiwan. E-commerce comparable sales rose 24.2% in the month of February 2019, following an increase of 22.1%, 13.6% and 46.1% in the months of January, December and November, respectively.
Costco, which shares space with Walmart (WMT - Free Report) , Target (TGT - Free Report) and Ross Stores (ROST - Free Report) , continues to be one of the dominant warehouse retailers based on the breadth and quality of merchandise offered. In fact, its strategy of selling products at heavily discounted prices has helped it to remain on growth track. In a year, shares of this Zacks Rank #2 (Buy) company have increased 20.3% compared with the industry’s growth of 18.5%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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