Costco Continues to Impress with Monthly Comps



August comps rose 7.3%

Costco (COST) is continuing to impress in August with its monthly sales numbers and stellar top-line performance. Its comps (comparables) rose 7.3% for the four-week period ended August 27, 2017. By region, comparable store sales rose 7.4% in the United States (SPY), 8.2% in Canada, and 6.0% in other international locations. The company’s net sales rose 10.1% year-over-year to $9.8 billion in August.

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Costco is reporting industry-leading comps growth amid a challenging retail environment and increased competition from Walmart (WMT), Target (TGT), and online giant Amazon (AMZN). Costco’s value pricing and vast offerings are resulting in increased store traffic, mainly in the United States, supporting comps growth. Its e-commerce sales rose 26.0% during the same period and are included in the comps data.

Excluding the impact of currency and gasoline price movements, the company’s comps rose 5.9%, with the United States, Canada, and other international markets reporting comps growth of 6.1%, 4.3%, and 6.7%, respectively.

The graph above shows a strong rebound in comps compared to the same prior year period. Last year, Costco’s comps remained flat in the month of August, while they rose 2.0% excluding the impact of currency fluctuations and changes in gas prices.

What drives Costco’s impressive sales?

Costco continues to smash its peers with its industry-leading net sales and comps growth rate. Its membership-only business model, value pricing through continued investment in price, focus on consumers’ shopping experience, and vast offerings help Costco attract buyers.

Other retailers, excluding Walmart, are struggling on the sales front. Stiff competition in the grocery space due to the expansion of Amazon and deep discounters such as Aldi and Lidl are taking a toll on their sales.


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