Costco (COST) Witnesses a Drop in Comparable Sales in June
Costco Wholesale Corporation COST failed to meet investors’ expectations once again as its sales performance disappointed. June represented the second consecutive month in which comparable sales experienced a decline.
June Sales Disappoint
Costco’s net sales increased 0.4% to $22.86 billion for the retail month of June from $22.78 billion last year. However, the rate of growth decelerated from the improvement of 1.2% and 3% witnessed in May and April, respectively.
Comparable sales for the retail month of June — the five-week period ended Jul 2, 2023 — declined 1.4%. This followed a drop of 0.3% registered in May. Comparable sales for June reflected a decrease of 2.5% in the United States and 0.6% in Canada but an increase of 4.5% in Other International locations, respectively.
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Excluding the impacts of changes in gasoline prices and foreign exchange, comparable sales for the month under discussion rose 3% on improvements of 2%, 6.5% and 5.1% in the United States, Canada and Other International locations, respectively.
We note that Costco’s comparable e-commerce sales fell 0.7% year over year. Excluding the impact of gasoline prices and foreign exchange, the same declined 0.4% year over year.
Conclusion
One of the widely recognized names in the industry, Costco has been providing its members with quality goods and services. The company, which is among the biggest winners amid the pandemic, sells products at discounted prices to draw customers who have been seeking both value and convenience. However, being a consumer-centric company, the warehouse retailer is not fully immune to headwinds impacting consumers’ spending activity.
We note that shares of this Zacks Rank #3 (Hold) company have risen 12.2% in the past six months against the Retail – Discount Stores industry’s decline of 0.3%.
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