March comps increased 8.6%
As retailers scramble to adjust their business models amid the consumer shift towards e-commerce and the growing presence of Amazon (AMZN) in the grocery space, Costco (COST) is quietly racing ahead of the competition. The company continues to impress with its stellar sales backed by solid comparable-store sales (or comps).
In March 2018, Costco’s comps improved 8.6%, reflecting 8.3% growth in the US, 7.1% in Canada, and 12.3% in other international locations. Meanwhile, the company’s net sales for the five-week period ended April 8, 2018, rose 10.9% YoY (year-over-year) to $12.9 billion.
Costco’s comps compare favorably to the prior-year period wherein comps improved 6.0%. Notably, the YoY improvement comes despite the negative impact of one less shopping day owing to the calendar shift of Easter. Besides, the company’s e-commerce sales increased 33.2%.
Excluding the changes in currency rates and gasoline prices, Costco’s comps increased 5.8% driven by 6.7% growth in the US, 2.0% in Canada, and 5.4% in other international locations. Meanwhile, e-commerce sales grew 32.1%.
Costco’s comps outperform peers
Costco’s comps also compare favorably to those of Walmart (WMT) and Target (TGT). Both these companies have managed to improve their comps on the back of their digital business, new product launches, and price investments, which has led to higher traffic. However, their growth rate remains well below Costco’s growth. Both Walmart and Target have been witnessing low to mid-single-digit growth in their comparable-store sales, while Costco is posting high-single-digit growth.
Costco’s unique business model hedges it against the growing threat of e-commerce players. Meanwhile, price investments and high membership renewal rates are leading to improved traffic and a higher average transaction size.