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Costco's (COST) Comparable Sales Continue to be Impressive

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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 its upbeat performance. Cumulatively, these factors have been aiding this Issaquah, WA-based company in registering impressive sales and comparable sales numbers.

Sales Continue to Accelerate

Costco’s net sales increased 19.2% to $16.47 billion for the retail month of October — the four-week period ended Oct 31, 2021 — from $13.82 billion in the last year. This followed an improvement of 15.8%, 16.2% and 16.6% in September, August and July, respectively.

Comparable sales for October jumped 17.5%. This followed an increase of 14.3%, 14.2% and 13.8% in September, August and July, respectively. Comparable sales for October reflect an improvement of 17%, 20.6% and 17% 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 11.8% on improvements of 11.7%, 10% and 14.7% in the United States, Canada and Other International locations, respectively.

 

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E-Commerce on the Rise

Costco has been rapidly adopting the omni-channel mantra to provide a seamless shopping experience, both online or 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 e-commerce comparable sales rose 16.5% in October. This followed increases of 10.6%, 2.8% and 7.4% in September, August and July, respectively.

To drive its online sales, the company in collaboration with Uber Technologies had earlier launched a grocery delivery pilot in 25 locations across Texas. This allows members to get their on-demand grocery delivery within hours with Uber and Uber Eats mobile apps. Again, Costco Logistics has boosted e-commerce capabilities and facilitated selling of "big and bulky" items. We note that Costco Logistics sales accounted for 24% of e-commerce sales in the final quarter of fiscal 2021.

Wrapping Up

One of the widely recognized names in the Retail – Discount Stores 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.

This Zacks Rank #1 (Strong Buy) company is focused on ramping up investments in the wake of the rising competition from the likes of Walmart (WMT - Free Report) , Dollar General (DG - Free Report) and Target (TGT - Free Report) . We believe that Costco’s business model and commitment toward opening membership warehouses will continue to drive traffic. Shares of the company have appreciated 35% in the past six months compared with the industry’s growth of 14.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.

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