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Unfazed by the Competition, Costco Sustained Momentum in October


Dec. 4 2020, Updated 10:53 a.m. ET

October comps performance

Costco (COST) has impressed with its sales performances in the past several months despite increased competition from online players and deep discounters. The company sustained its growth momentum in October, and on November 7, it announced that its comps had increased 8.6% in the four-week period that ended on November 4. It faced a tough YoY (year-over-year) comparison but managed industry-leading sales growth.

Costco’s comps grew 7.5% in October 2017. Its comps have increased at an average rate of 9.2% each month so far this year.

By region, Costco’s comps rose 10.4% in the United States, 2.4% in Canada, and 5.5% in other international markets. Its net sales increased 10.6% to $11.16 billion in October, while its e-commerce sales grew 20.0%.

Excluding the impact of fluctuations in the foreign exchange rate and gasoline prices, Costco’s comps increased 6.6%, with the United States, Canada, and other international markets recording comps growths of 7.1%, 4.2%, and 6.6%, respectively.

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Analysts expect Costco to sustain its sales growth momentum in the coming months. Costco continues to invest in pricing to widen the value gap between itself and its peers, and the effort is driving its traffic and comps. Expanded offerings and a high membership renewal rate are also expected to support its comps growth rate.

So far this year, Costco has outperformed both Walmart (WMT) and Target (TGT) in terms of comps growth. The company was unfazed by Amazon’s (AMZN) expansion in the grocery space.

Both Target and Walmart also reported strong comps growth in the first six months of 2018, and both companies have significantly ramped up their digital offerings, which has driven their traffic.


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