How Did Costco’s Sales Fare in the Fourth Quarter?



Costco beat the estimates

Costco (COST) continued to impress investors with its strong sales. The company reported total revenues of $44.4 billion and increased 5.0% YoY (year-over-year). The revenues were slightly ahead of analysts’ expectation of $44.3 billion. The following graph shows that Costco has surpassed analysts’ sales expectation in the past six quarters.

Target (TGT) and Walmart (WMT) have expanded their digital offerings, which are generating strong traffic growth. Meanwhile, Amazon (AMZN) has expanded in the grocery space. Amazon is matching these big-box retailers’ services. Despite facing more competition and lagging its peers on the digital front, Costco continued to report stellar comps growth, which is impressive.

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Fourth-quarter sales

Costco’s total revenues, which consist of warehouse sales and membership fees, grew 5.0% in the fourth quarter due to strong comps growth and increased membership fee income. During the quarter, Costco’s comps rose 9.5%, which reflects strong traffic. Costco’s membership fee income rose 5.7% to $1 billion.

Target and Walmart also reported exceptional comps growth during the last reported quarter. Target’s comps increased 6.5%—the highest level in the past 13 years. Walmart’s comps at its US business rose 4.5%—the highest level in the past ten years. However, Walmart and Target’s comps growth rate was lower than Costco’s comps growth rate.

Costco’s comps grew 10.8% in the United States, 5.7% in Canada, and 6.7% in other international locations. Excluding fluctuations in the gas price and currency rates, Costco’s comps increased 7.2%. The US, Canada, and other international locations grew 7.8%, 4.6%, and 6.9%, respectively.


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