In spite of operating in a competitive retail landscape, Costco Wholesale Corporation COST has reported decent comparable sales (comps) number for the month of March. Certainly, better price management, strong membership trends and increasing penetration of e-commerce business have been playing a crucial role in the healthy comps run. Management informed that an additional shopping day in the month of March due to the calendar shift of Easter favorably impacted total sales and comps by roughly one to one and one-half percent.
The operator of membership warehouses highlighted that comps for the five-week period ended Apr 7, 2019 rose 5.7% following an increase of 3.5% in February and 5.2% in January. Comps for March reflect an increase of 6.9% in the United States, 3.8% in Canada and 1.6% in Other International locations, respectively.
Excluding the impact of foreign currency fluctuations, gasoline prices and accounting change concerning revenue recognition (ASC 606), comps for the month rose 5.9%, while the same increased 5.5%, 6.7% and 7.4% in the United States, Canada and Other International locations, respectively.
Meanwhile, net sales improved 7.4% to $13.87 billion in the month under review, following an increase of 5% and 8% in February and January, respectively.
For the 31 weeks ended Apr 7, 2019, net sales came in at $88.29 billion, up about 8.4% from $81.43 billion reported in the year-ago period. Comps for the period grew 6.8%, while the same increased 8.7%, 1.5% and 2.2% 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 surged 20.6% in the month of March 2019, following an increase of 24.2% and 22.1%, in the months of February and January, respectively.
Costco, which shares space with Walmart WMT, Target TGT and Ross Stores ROST, 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 the past three months, shares of this Zacks Rank #2 (Buy) company have increased 17.5%, outperforming the industry’s growth of 13.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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