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Costco's (COST) Stellar Comps & Sales Run Continue in December

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Costco Wholesale Corporation’s COST growth strategies, better price management, decent membership trends and increasing penetration of e-commerce business have been contributing to its upbeat performance. Cumulatively, these factors have been aiding this Issaquah, WA-based company in registering impressive sales numbers.

We note that shares of this Zacks Rank #2 (Buy) company have appreciated 35.9% in the past six months compared with the Retail – Discount Stores industry’s growth of 15.6%.

Comparable Sales Accelerate

Comparable sales for the retail month of December — the five-week period ended Jan 2, 2022 — jumped 14.5%. This followed increases of 14.1%, 17.5% and 14.3% in November, October and September, respectively. Comparable sales for December reflect an improvement of 15.9%, 16.5% and 6.4% in the United States, Canada and Other International locations, respectively.

Excluding the impacts of changes in gasoline prices and foreign exchange, comparable sales for the month under discussion rose 11.5% on improvements of 11.5%, 13.6% and 9.6% in the United States, Canada and Other International locations, respectively.

Zacks Investment Research
Zacks Investment Research

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Impressive Sales Performance

Costco’s net sales increased 16.2% to $22.24 billion for the retail month of December from $19.14 billion in the last year. This followed improvements of 15.7%, 19.2% and 15.8% in November, October and September, respectively.

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.

E-Commerce on the Rise

Costco has been rapidly adopting the omni-channel mantra in a bid to provide a seamless shopping experience, both online and at stores. The company has been gradually expanding its e-commerce capabilities in the United States, Canada, the U.K., Mexico, Korea, Taiwan, Japan, and Australia.

We note that comparable e-commerce sales rose 17.8% in December. This followed increases of 12.2%, 16.5% and 10.6% in November, October and September, respectively. Costco Logistics has bolstered e-commerce capabilities and facilitated the selling of "big and bulky" items.

3 More Picks You Can’t Miss Out On

Some better-ranked stocks are Tapestry TPR, The Children's Place PLCE and Target TGT.

Tapestry, which provides luxury accessories and branded lifestyle products, carries a Zacks Rank #1 (Strong Buy). The company pulled off a trailing four-quarter earnings surprise of 29%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Tapestry’s current financial year sales and EPS suggests growth of 14.8% and 17.9%, respectively, from the year-ago period. TPR has an expected EPS growth rate of 12.3% for three-five years.

The Children's Place, pure-play children’s specialty apparel retailer in North America, sports a Zacks Rank #1. PLCE’s bottom line has outperformed the Zacks Consensus Estimate by a wide margin in the trailing four quarters.

The Zacks Consensus Estimate for The Children's Place’s current financial year sales and EPS suggests growth of 27.4% and 464.9%, respectively, from the year-ago period.

Target, a general merchandise retailer, carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 19.7%, on average.

The Zacks Consensus Estimate for Target’s current financial year sales and EPS suggests growth of 13.9% and 40%, respectively, from the year-ago period. TGT has an expected EPS growth rate of 14.4% for three-five years.


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Target Corporation (TGT) : Free Stock Analysis Report

Costco Wholesale Corporation (COST) : Free Stock Analysis Report

The Children's Place, Inc. (PLCE) : Free Stock Analysis Report

Tapestry, Inc. (TPR) : Free Stock Analysis Report

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