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Costco (COST) Continues With Solid Comparable Sales Momentum

Costco Wholesale CorporationCOST has sustained its stellar comparable sales (comps) run so far this year and is well poised to replicate its performance in 2019 as well. In fact, improving job prospects, rising disposable income and upbeat sentiment have created a conducive environment for retailers and this operator of membership warehouses is no exception.

In November, comps rose 9.2% following an advance of 8.6% in October, 8.4% in September, 9.2% in August and 8.3% in July. Comps for November reflect an increase of 12.2%, 1.8% and 0.7% at the United States, Canada and Other International locations, respectively.

Excluding the impact of foreign currency fluctuations, gasoline prices and accounting change concerning revenue recognition (ASC 606), comps for the month rose 8.5%, while the same increased 10.1%, 5% and 3.7% at the United States, Canada and Other International locations, respectively.

Meanwhile, net sales have improved 9.8% to $12.77 billion during the month under review, following an increase 10.6%, 10.3%, 12.2%, and 10.1% in the months of October, September, August and July, respectively.

For the first quarter of fiscal 2019, net sales came in at $34.31 billion, up about 10.3% from $31.12 billion reported in the year-ago period. Comps for the quarter grew 8.8%, while the same increased 11%, 2.4% and 4% at the United States, Canada and Other International locations, respectively.

Costco is also steadily expanding e-commerce capabilities in the United States, Canada, the U.K., Mexico, Korea and Taiwan. E-commerce comparable sales advanced 46.1%, 20%, 28.6%, 23.8% and 20.9% in the months of November, October, September, August and July, respectively. During the first quarter, management highlighted that e-commerce comparable sales surged 32.3%.

Costco, which shares space with Walmart WMT , Target TGT and Ross Stores ROST , continues to be one of the dominant warehouse retailers based on the breadth and quality of merchandise offered. In fact, the strategy to sell products at heavily discounted prices has helped it to remain on growth track.

Better price management, strong membership trends and increasing penetration of e-commerce business have aided Costco in sustaining impressive comps run. So far in the year, the shares of this Zacks Rank #2 (Buy) company have surged 20.8% outperforming the industry 's growth of 9.8%. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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