Wall Street's upbeat these days, and there are a lot more companies hitting new highs than new lows. More than 700 exchange-listed stocks tapped fresh 52-week highs last week, a welcome contrast to the less than 200 investments clocking in with new lows.
Costco (NASDAQ: COST), McDonald's (NYSE: MCD), and Planet Fitness (NYSE: PLNT) are three of the hundreds of stocks hitting new high-water marks. Let's dive into all three stories to see what they're doing right in industries that are largely out of favor.
Image source: Costco.
Supermarkets in general and warehouse clubs in particular have been feeling the pinch since the world's largest online retailer gobbled up the country's top organic grocery store chain. Costco is doing just fine. Comps rose 5.4% in its latest quarter, up a heartier 6.7% once you adjust for gas price deflation, foreign currency swings, and new revenue-recognition rules.
Costco's lean model where it passes on savings to consumers continues to resonate with shoppers, making it immune to high-tech home-delivery specialists eating away at the share of more conventional grocers. Costco's 7.3% uptick in sales for the quarter matches the increase in membership fee revenue.
There are a couple of restaurants hitting new lows, but the same can't be said about the most recognized chain in the planet. McDonald's may not seem to be growing if you stop at the top line. Revenue has moved lower for five years in a row, but that's by design as the chain hands over more of its company-owned locations to successful franchisees. The strategy is naturally beefing up margins, and net income is coming off of back-to-back years of double-digit-percentage increases.
McDonald's has also been an early adopter of food delivery to pad its sales as a prominent UberEats option. The world's largest burger chain is nailing the barbell approach to pricing where it balances premium sandwiches and salads with its popular Dollar Menu, and it's also investing in technology to get to know its customers even better.
Investors don't view gyms and fitness centers as hotbeds of growth, but Planet Fitness has a winning streak worth watching. It has now rattled off 48 consecutive quarters of positive comps. As fickle as fitness center members may be, Planet Fitness has now scored a dozen years of perfect year-over-year growth at the unit level.
Planet Fitness charges as little as $10 a month for unlimited access to well-maintained workout machines, and the value proposition works. The frills-free chain is able to keep rates low and invest nearly 10% of its revenue on marketing. Expansion is another big part of this story, as revenue and adjusted income soared 30% and 38%, respectively, in Planet Fitness' latest quarter.
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