We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Will Costco Witness Decent Run on Bourses in the New Year?
Read MoreHide Full Article
Costco Wholesale Corporation’s (COST - Free Report) sound fundamentals and growth efforts strengthen its position in the ultra-competitive retail landscape. Further, factors such as steady wage gains, solid labor market and improving consumer sentiment have been favoring this operator of membership warehouses. Notably, this Zacks Rank #3 (Hold) stock has soared 44.7% so far in the year, outperforming the S&P 500’s rally of 27.2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
However, shares of this Issaquah, WA-based company recently came under pressure as evident from its decline of 1.4% in a month. The stock got hurt after the company highlighted that with Thanksgiving happening a week later this year compared with the prior year, total and comparable sales were adversely impacted by roughly 0.5% during first-quarter fiscal 2020. Moreover, management highlighted that e-commerce sales were affected by an estimated 12 percentage points.
Nevertheless, industry experts believe that this a short-term blip, and Costco with its better price management and strong membership trends will definitely overcome this. Additionally, the stock’s long-term earnings growth rate of 8.1% and a VGM Score of B reflect its inherent strength. Moreover, the Zacks Consensus Estimate for fiscal 2020 top and bottom line indicates year-over-year improvement of 6.5% and 4.8%, respectively. Notably, the company looks well poised to enter the New Year.
Sound Fundamentals to Support Stock
Costco remains one of the dominant warehouse retailers based on the breadth and quality of merchandise offered. In fact, the company’s strategy of selling products at heavily discounted prices has helped it remain on growth trajectory. Again, a differentiated product range enables the company to provide an upscale shopping experience for members.
Certainly, the company’s decent comparable sales (comps) run has been shaping the stock’s bullish course on the bourses barring the recent hiccup. Comps for the month of November rose 5.3% following an increase of 5.7% in October, 4.2% in September, 5.5% in August and 5.6% in July. Meanwhile, net sales improved 6.7% in the month of November, following a rise of 6.8%, 5.6%, 6.9% and 7.9% in October, September, August and July, respectively.
We believe that Costco’s business model and commitment toward opening membership warehouses will continue to drive traffic. The company also remains focused on ramping up investments in the wake of rising competition from the likes of Dollar Tree (DLTR - Free Report) , Dollar General (DG - Free Report) and Target (TGT - Free Report) .
Moreover, with the wave of digital transformation hitting the sector, Costco is rapidly adopting the omni-channel mantra to provide a seamless shopping experience, whether online or in-stores. It is steadily expanding e-commerce capabilities in the United States, Canada, the U.K., Mexico, Korea, Taiwan and Japan.
Quite apparent, Costco has been able to create a niche for itself in the changing retail landscape.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.6% per year.
These 7 were selected because of their superior potential for immediate breakout.
Image: Bigstock
Will Costco Witness Decent Run on Bourses in the New Year?
Costco Wholesale Corporation’s (COST - Free Report) sound fundamentals and growth efforts strengthen its position in the ultra-competitive retail landscape. Further, factors such as steady wage gains, solid labor market and improving consumer sentiment have been favoring this operator of membership warehouses. Notably, this Zacks Rank #3 (Hold) stock has soared 44.7% so far in the year, outperforming the S&P 500’s rally of 27.2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
However, shares of this Issaquah, WA-based company recently came under pressure as evident from its decline of 1.4% in a month. The stock got hurt after the company highlighted that with Thanksgiving happening a week later this year compared with the prior year, total and comparable sales were adversely impacted by roughly 0.5% during first-quarter fiscal 2020. Moreover, management highlighted that e-commerce sales were affected by an estimated 12 percentage points.
Nevertheless, industry experts believe that this a short-term blip, and Costco with its better price management and strong membership trends will definitely overcome this. Additionally, the stock’s long-term earnings growth rate of 8.1% and a VGM Score of B reflect its inherent strength. Moreover, the Zacks Consensus Estimate for fiscal 2020 top and bottom line indicates year-over-year improvement of 6.5% and 4.8%, respectively. Notably, the company looks well poised to enter the New Year.
Sound Fundamentals to Support Stock
Costco remains one of the dominant warehouse retailers based on the breadth and quality of merchandise offered. In fact, the company’s strategy of selling products at heavily discounted prices has helped it remain on growth trajectory. Again, a differentiated product range enables the company to provide an upscale shopping experience for members.
Certainly, the company’s decent comparable sales (comps) run has been shaping the stock’s bullish course on the bourses barring the recent hiccup. Comps for the month of November rose 5.3% following an increase of 5.7% in October, 4.2% in September, 5.5% in August and 5.6% in July. Meanwhile, net sales improved 6.7% in the month of November, following a rise of 6.8%, 5.6%, 6.9% and 7.9% in October, September, August and July, respectively.
We believe that Costco’s business model and commitment toward opening membership warehouses will continue to drive traffic. The company also remains focused on ramping up investments in the wake of rising competition from the likes of Dollar Tree (DLTR - Free Report) , Dollar General (DG - Free Report) and Target (TGT - Free Report) .
Moreover, with the wave of digital transformation hitting the sector, Costco is rapidly adopting the omni-channel mantra to provide a seamless shopping experience, whether online or in-stores. It is steadily expanding e-commerce capabilities in the United States, Canada, the U.K., Mexico, Korea, Taiwan and Japan.
Quite apparent, Costco has been able to create a niche for itself in the changing retail landscape.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.6% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>