Shares of Costco Wholesale Corporation (COST) dropped marginally by 0.4% following comparable-store sales results for July, the four weeks ended Aug 3, 2014, that fell short of analysts' expectations. The warehouse retailer however delivered comparable-store sales growth of 5%, reflecting an increase of 5% in the U.S. and 6% at international locations.
Excluding the effect of deflation in gasoline prices and impact of foreign currency fluctuations, Costco’s comparable-store sales for July rose 6%, reflecting comparable sales growth of 5% at its U.S. locations and 7% at international outlets.
Most of the retailers benefited during the month under review due to increasing consumer confidence, improving job prospects and aggressive promotional strategies. Retailers such as Rite Aid Corporation (RAD), Walgreen Co. (WAG) and L Brands, Inc. (LB) saw their comparable-store sales rise 4.6%, 5.2% and 6%, respectively, during July.
Coming to Costco, comparable-store sales for the 48-week period increased 4%, buoyed by 5% growth in the U.S. and 3% increase at international locations. Excluding the effect of gasoline prices and foreign currency fluctuations, Costco’s comparable-store sales for the period jumped 6%. Comps increased 5% in the U.S. and 7% at international locations.
Total net sales for July grew 9% to $8.55 billion from $7.87 billion in the year-ago period. Costco’s net sales for the 48-week period increased 7% to $101.43 billion from $94.91 billion in the year-ago period.
The company currently operates 660 warehouses, 466 in the United States and Puerto Rico, 88 in Canada, 33 in Mexico, 25 in the United Kingdom, 20 in Japan, 11 in Korea, 10 in Taiwan, 6 in Australia and 1 in Spain. Further, the company plans to open 3 more warehouses before the end of fiscal 2014.
Currently, Costco carries a Zacks Rank #3 (Hold).
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