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Costco Wholesale Corporation

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Costco continues to be one of the dominant retail wholesalers based on the breadth and quality of merchandise offered. Cash strapped customers continue to reckon Costco as a viable option for low-cost necessities. We are also encouraged by the company’s expansion strategy, as it remains committed to opening new clubs in the domestic and international markets. The company is also gradually expanding its E-commerce capabilities. However, stiff competition and cautious consumer spending have been weighing upon the sector’s performance. Investors are also worried about Costco's sluggish comps performance that remained flat during the third quarter of fiscal 2016, following an increase of 1% in the preceding quarter. While lower gasoline price is impacting U.S. comps, currency fluctuations are hurting international comps. On the sales front, the company had missed the Zacks Consensus Estimate for sixth quarter in row.

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