Costco Beats’ Q3 Sales Estimate Due to Higher Comps

Costco (COST) posted better-than-expected sales for the third quarter. Costco’s total revenues of $34.7 billion beat analysts’ expectation and increased 7.4% on a YoY (year-over-year) basis. Continued momentum in comps and higher membership fee income supported Costco’s third-quarter revenues.

In comparison, higher comps also supported Target’s (TGT) top-line growth during the last reported quarter. Target beat analysts’ estimate and marked 5.0% growth in its sales. Walmart (WMT) missed analysts’ sales expectation due to currency volatility. However, Walmart’s continued comps growth was impressive.

Costco’s comps rose 5.5% during the third quarter, which reflected a 3.7% increase in the traffic and 1.8% growth in the ticket size. By geographies, Costco’s comps rose 7% in the United States due to 3.4% growth in the traffic. Costco’s comps increased 1.3% in Canada and 1.7% in other international markets. The company’s e-commerce sales rose 22%.

On an adjusted basis, excluding the volatility in currency and gasoline prices, Costco’s comps rose 5.6%. The comps increased 5.5% in the United States, 5.1% in Canada, and 6.9% in other international markets. The company’s adjusted e-commerce sales increased 19.5%.

Costco’s membership fee income increased 5.3% to $0.8 billion. The membership renewal rates remained stable. The membership renewal rates increased 90.7% in the US and Canada. The company’s worldwide membership renewal rates were 88.3%.