Costco Wholesale Corporation
), the leading U.S. warehouse club operator, posted healthy
comparable-store sales data for the five-week period ended Feb 3,
2013 that marginally betters analysts' expectations. Sales for
the month were negatively affected by changes in gasoline prices
but favorably by foreign currency fluctuation.
After an increase of 9% in December, Costco's comparable-store
sales for January climbed 4%, reflecting comparable sales growth
of 3% at its U.S. locations and 5% at international outlets. In
the prior-year period, the company delivered comparable-store
sales growth of 8%.
In terms of performance, this Zacks Rank #3 (Hold) stock fared
better than its nearest competitor,
) that came up with a 3.1% increase in comparable-store sales.
Jan 2013 was strong on the whole for most retailers, with players
Stage Stores Inc.
) registering comparable-store sales growth of 13.3%, 11.4% and
Costco's comparable-store sales for the 22-week period ended
Feb 3, 2013 rose 6% buoyed by a 6% and 7% jump in
comparable-store sales in the U.S. and international locations,
Excluding the effects of gasoline prices and foreign currency
fluctuations, Costco's comparable-store sales for January rose 4%
with U.S. and international comparable-sales elevating 4% and 3%,
respectively. For the 22-week period, the company witnessed
comparable-store sales growth of 5%, with U.S. and international
sales rising 6% and 5%, respectively.
Total net sales for January grew 7% to $9.35 billion from
$8.74 billion in the year-ago period. Costco's sales for the
22-week period increased 9% to $43.77 billion from $40.18 billion
in the year-ago quarter.
The five-week period ended Feb 3, 2013 has one less day
compared with the prior-year period on account of the timing of
the New Year's holiday. This led to a decrease of approximately
2% in total and comparable-store sales.
A differentiated product range enables Costco to provide an
upscale shopping experience to its members, resulting in market
share gains and higher sales per square foot. Moreover, the
company continues to maintain a healthy membership renewal
Costco also remains committed to opening new clubs in domestic
and international markets. The company's diversification strategy
is a natural hedge against risks that may arise in specific
However, Costco faces stiff competition from Target and Sam's
Club, a division of
Wal-Mart Stores Inc.
), which follows a similar business model that pushes through
high volumes of merchandise at low prices in membership-only
warehouse clubs. Thus, aggressive pricing to gain market share
and drive traffic amid stiff competition may depress sales and
Costco currently operates 622 warehouses, comprising 448
warehouses in the United States and Puerto Rico, 85 in Canada, 32
in Mexico, 23 in the United Kingdom, 13 in Japan, 9 in Taiwan, 9
in Korea, and 3 in Australia. The company now targets 14 more new
warehouses before the end of fiscal 2013.
COSTCO WHOLE CP (COST): Free Stock Analysis
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KOHLS CORP (KSS): Free Stock Analysis Report
STAGE STORES (SSI): Free Stock Analysis
TARGET CORP (TGT): Free Stock Analysis Report
WAL-MART STORES (WMT): Free Stock Analysis
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