Costco same-store sales, total comparable sales increase in December
Yahoo Finance Live anchors discuss the rise in stock for Costco following December sales.
Video Transcript
- Welcome back to "Yahoo Finance." On this jobs report Friday, let's dive into a few hot tickers ahead of that opening bell on Wall Street, starting with our company of the year from last year, that'd be Costco. The retail giant reported total comparable sales for December that beat the average analyst estimate for the month here.
Same store sales, really good month for Costco. Core same store sales up 7.3%. And more importantly were these two things. Year over year inflation moderated. That is good and maybe help improve the profit margins at Costco. And then also some renewed strength in non-foods categories.
And we talked to Costco, the CEO, Craig Jellinek, a couple of weeks ago or about a month ago for our Company of the Year. He said he was seeing some weakness in discretionary purchases. So the fact that he came back in that key month of December right smack in the middle of holiday season is a positive sign, and that's why the market likes it.
- Some weakness in e-commerce too. I wonder what it's going to take for e-commerce play to really kind of ensue or kick off at Costco in a wave that we've seen at the likes of Walmart, and subsidiary Sam's Club, and some of the other buying in bulk retailers.
But then just broadly across retail as a whole, and that's been such a boon to their ability to grow out their membership base, grow out this rewards base, and kind of that loyalty fan base that they have as well. And I wonder how that could really benefit Costco in the future if they were able to kind of lean into that even more so, instead of just buy online, pick up in store. And so the e-commerce front, even though that was down by about 6% over the past five weeks, and 18 weeks down by about 5%, I'm wondering what type of investments they'll make in this near term.
- I was just going to say when you're talking about the big ticket items too that are maybe-- or people maybe not buying as much, Oliver Chen over at Cowen, who said that this is his top pick for 2023, said, "Increased trade down in food and sundries could potentially offset big ticket item softness." In other words, if more people are coming to Costco in the view that they're going to get a bargain, then that can help offset some of the discretionary spending that's going away.
- It's interesting. So Costco, I think they will admit, and they have, they were late to the online game. And why they may not be in that same sphere as an Amazon or a Walmart and Target, they just have a very limited thing to stuff they sell online. That's just my take. And also, there is something to be said about going into that store and having some form of fun experience, whether you like shopping and spending two hours in Costco on a Saturday morning, whatever it is.
- Two hours?
- It could be fun. It is fun for some people to walk around these stores and be surprised by what they see in there.
- Yeah, that's right. You can't buy the hot dog online for $1.50.
- I wish you could, though.
- A lot of people. But I think for Costco, I mean, we were just talking about another kind of buy in bulk or retailer that has really done well in the online game, but that has also kind of seen its share price really suffer and now looking to find a suitor for an acquisition, and that's Boxed.
I wonder if there is some kind of kicking of the tires that a Costco looking at a Boxed, and even the membership base that they have, and the recurring kind of business to business and buyers, but then also the B to C side too where there could be perhaps some integration opportunities there. But, again, I mean, that's just speculation and something that I hope that they're already talking about.
- Boxed shares up 17%. I guess somebody is listening, Brad.
- Just because of that just.
- Just because of that.
- There you go.
