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Costco Outperformed Target and Walmart with Comps Growth

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Quarterly comps performance

Costco (COST) has continued to generate an industry-leading comparable-store sales (or comps) growth rate despite increased competition and rivals ramping up their digital platforms. In fiscal 2Q18, Costco’s comps rose 8.4%, reflecting increased traffic of 3.7% worldwide and 3.4% in the US and a rise in transaction size of 4.6%.

By geography, Costco’s comps grew 7.1% in the US, 8.7% in Canada, and 15.7% at other international locations. Meanwhile, the company’s e-commerce channel saw 28.5% growth during the reported quarter.

Excluding the impact of currency movement and inflation in gasoline prices, Costco’s comps improved 5.4% in fiscal 2Q18. Comps grew 5.7% in the US, 2.5% in Canada, and 7.4% at other international locations.

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In comparison, Walmart-owned (WMT) Sam’s Club saw 2.4% growth in its comps during fiscal 4Q18. The club chain witnessed 4.3% growth in traffic, which was partially offset by a 1.9% decline in average ticket size. Meanwhile, Target (TGT) reported 3.6% improvement in comps during the last reported quarter. Both traffic and ticket size improved for Target. Notably, strong digital sales continue to contribute meaningfully to Walmart’s and Target’s comps growth rate.

Costco’s monthly comps performance

Besides its quarterly performance, Costco also reported its comps data for February 2018 (period ended March 4, 2018). In February, Costco’s comps improved 10.5% driven by increased traffic and ticket size. Meanwhile, the shift in the timing of the Chinese New Year contributed 4.5% to its comps growth.

Comps improved 9.0% in the US, 8.4% in Canada, and 22.2% at other international locations. Meanwhile, its e-commerce business saw 38.1% growth in February 2018. Ex-fuel and currency movements, comps grew 7.7% with US, Canada, and other international locations witnessing an increase of 7.5%, 3.2%, and 14.1%, respectively.

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