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Costco Sustained Growth Momentum in September

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September comps

Costco continues to impress investors with its comparable sales (or comps) growth rate. On October 10, the company announced that it had sustained its growth momentum with comps growth of 8.3% in September. Costco managed to improve its comps despite facing a tough YoY comparison. Costco’s comps grew 8.9% in September 2017.

Costco’s comps jumped 10.4% in the United States, 2.9% in Canada, and 4.3% in other international markets. Net sales for the five-week period ended October 7 increased 10.3% to $13.64 billion, while e-commerce sales grew 28.6%.

Excluding currency fluctuations and changes in gas prices, Costco’s comps increased 7.3% overall, 7.7% in the United States, 6.4% in Canada, and 6.2% in other international locations in September. Costco’s e-commerce sales increased 25.7% during the reported period.

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Outlook

Costco is expected to sustain the growth momentum in coming months. Analysts expect Costco to report healthy comps growth driven by its continued investment in price, which attracts value-driven shoppers. Meanwhile, Costco’s expanded offerings, square footage expansion, and high membership renewal rate of 90.4% in the US and Canada should support its sales.

Costco has outperformed both Target (TGT) and Walmart (WMT) with its comps growth rate. In the past one year, Costco’s monthly comps have grown at an average rate of 9.4%, which is impressive. Wall Street analysts maintain a “buy” rating on Costco stock.

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