Shares of Costco Wholesale Corporation (COST) rose 4.7% following comparable-store sales results for the four weeks ended Aug 31, 2014 that fared better than analysts' expectations. On Sep 4, the warehouse retailer announced comparable-store sales growth of 7%, reflecting an increase of 7% 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 August rose 8%, reflecting comparable sales growth of 7% at its U.S. locations and 8% at international outlets.
Retailers benefited during the month under review from increasing consumer confidence, improving job prospects and back-to-school promotional strategies. Retailers such as Rite Aid Corp. (RAD) and L Brands, Inc. (LB) saw their comparable-store sales rise 3.9% and 5%, respectively, during the month.
Coming to Costco, comparable-store sales for the 16-week period increased 6%, buoyed by an equivalent percentage increase across the U.S. and international locations. Excluding the effect of gasoline prices and foreign currency fluctuations, comparable-store sales for the period jumped 7%. Comps increased 6% in the U.S. and 8% at international locations.
Comparable-store sales for the 52-week period increased 4% on the back of 5% growth in the U.S. and 3% increase at international locations. Excluding the effect of gasoline prices and foreign currency fluctuations, comparable-store sales for the period jumped 6% on the back of comps increase of 5% in the U.S. and 7% at international locations.
Costco’s total net sales for August grew 10% to $8.8 billion from $8 billion in the year-ago period. Net sales for the 16-week and 48-week period increased 9% and 7% to $34.8 billion and $110.2 billion, respectively.
The company currently operates 663 warehouses, 468 in the United States and Puerto Rico, 88 in Canada, 33 in Mexico, 26 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 9 more warehouses before the end of calendar-year 2014.
Costco, which is slated to report fourth quarter fiscal 2014 results on Oct 8, carries a Zacks Rank #3 (Hold). A better-ranked stock in the retail sector is Burlington Stores, Inc. (BURL) which sports a Zacks Rank #1 (Strong Buy).
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