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Costco's (COST) Sturdy Comps, Price Management to Fuel Sales
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Costco Wholesale Corporation’s (COST - Free Report) growth strategies, better price management, decent membership trends and increasing penetration of e-commerce business have been contributing to the company’s performance. Thanks to its status of “essential retailers,” this Issaquah, WA-based company has been benefiting from coronavirus-induced stock piling. Cumulatively, these factors have been aiding this operator of membership warehouses in registering impressive comparable sales run.
In fact, the company’s strategy to sell products at discounted prices has helped it expand customer base. Under the current circumstances, people are exhibiting a preference for discount stores for essentials or other daily purchases. Apparently, Costco has emerged as viable option for them. The company’s differentiated product range resonates well with customers’ spending habits.
Notably, Costco registered an increase of 11.1% in net sales during the month of June. This followed an improvement of 7.5% in the month of May. Comparable sales for the month of June surged 11.5%, reflecting an increase of 11%, 8.4% and 18% in the United States, Canada and Other International locations, respectively. Comparable sales in the month of May had risen 5.4%.
The company’s e-commerce sales have been showcasing a sharp increase owing to growing stay-at-home trends to maintain social distance amid the pandemic. We note that e-commerce comparable sales soared 85.8% during the month of June. This follows an increase of 106.2%, 85.7% and 48.3% in the months of May, April and March, respectively. Costco operates e-commerce sites in the United States, Canada, the U.K., Mexico, Korea, Taiwan, Japan and Australia.
To drive its online sales, the company launched CostcoGrocery to deliver non-perishable items to buyers’ homes. Its partnership with Instacart facilitates same-day delivery of groceries to shoppers. The company acquired Innovel Solutions, a leading provider of third-party end-to-end logistics solutions. The buyout bolsters Costco’s e-commerce capabilities and facilitate sales of "big and bulky" items.
Wrapping Up
Costco continues to be one of the dominant warehouse retailers based on the breadth and quality of merchandise offered. It is also focused on ramping up investments in the wake of rising competition from the likes of Dollar Tree (DLTR - Free Report) , Dollar General (DG - Free Report) and Target (TGT - Free Report) . We believe that the company’s business model and commitment toward opening membership warehouses will continue to drive traffic.
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.
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Costco's (COST) Sturdy Comps, Price Management to Fuel Sales
Costco Wholesale Corporation’s (COST - Free Report) growth strategies, better price management, decent membership trends and increasing penetration of e-commerce business have been contributing to the company’s performance. Thanks to its status of “essential retailers,” this Issaquah, WA-based company has been benefiting from coronavirus-induced stock piling. Cumulatively, these factors have been aiding this operator of membership warehouses in registering impressive comparable sales run.
In fact, the company’s strategy to sell products at discounted prices has helped it expand customer base. Under the current circumstances, people are exhibiting a preference for discount stores for essentials or other daily purchases. Apparently, Costco has emerged as viable option for them. The company’s differentiated product range resonates well with customers’ spending habits.
Notably, Costco registered an increase of 11.1% in net sales during the month of June. This followed an improvement of 7.5% in the month of May. Comparable sales for the month of June surged 11.5%, reflecting an increase of 11%, 8.4% and 18% in the United States, Canada and Other International locations, respectively. Comparable sales in the month of May had risen 5.4%.
The company’s e-commerce sales have been showcasing a sharp increase owing to growing stay-at-home trends to maintain social distance amid the pandemic. We note that e-commerce comparable sales soared 85.8% during the month of June. This follows an increase of 106.2%, 85.7% and 48.3% in the months of May, April and March, respectively. Costco operates e-commerce sites in the United States, Canada, the U.K., Mexico, Korea, Taiwan, Japan and Australia.
To drive its online sales, the company launched CostcoGrocery to deliver non-perishable items to buyers’ homes. Its partnership with Instacart facilitates same-day delivery of groceries to shoppers. The company acquired Innovel Solutions, a leading provider of third-party end-to-end logistics solutions. The buyout bolsters Costco’s e-commerce capabilities and facilitate sales of "big and bulky" items.
Wrapping Up
Costco continues to be one of the dominant warehouse retailers based on the breadth and quality of merchandise offered. It is also focused on ramping up investments in the wake of rising competition from the likes of Dollar Tree (DLTR - Free Report) , Dollar General (DG - Free Report) and Target (TGT - Free Report) . We believe that the company’s business model and commitment toward opening membership warehouses will continue to drive traffic.
Notably, shares of this Zacks Rank #3 (Hold) company have rallied approximately 11.1% so far this year against the industry’s decline of 1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.
Click here for the 6 trades >>