Shares of Costco Wholesale Corporation (COST) fell roughly 1.5% after the company posted comparable-store sales (comps) data for the four weeks ended Feb 1, 2015 that came below analysts' expectations. On Feb 4, the warehouse retailer announced flat comps for the month of January, reflecting an increase of 2% at its U.S. locations, but a decline of 4% at international locations.
This followed comps increase of 5% and 3% in November and December, respectively. Lower gasoline prices and a strong U.S. dollar took a toll on the company’s performance.
Excluding the effect of deflation in gasoline prices and the impact of foreign currency fluctuations, Costco’s comps for January rose 7%, reflecting an equivalent increase across its U.S. locations and a 6% jump at its international outlets.
However, some retailers benefited during the month under review from increasing consumer confidence, improving job prospects and the absence of unfavorable weather conditions that existed last year. Retailers such as Zumiez, Inc. (ZUMZ) and L Brands, Inc. (LB) saw their comps rise 12.3% and 7%, respectively, during the month.
Coming to Costco, comps for the 22-week period increased 3%, buoyed by a 5% rise at its U.S. locations, partially offset by a 1% decline at its international locations. Excluding the effect of gasoline prices and foreign currency fluctuations, comps for the period jumped 7%, reflecting an equivalent increase across its U.S. and international locations.
Costco’s total net sales for January grew 2% to $8.16 billion from $7.99 billion in the year-ago period. Net sales for the 22-week period increased 6% to $49.01 billion from $46.32 billion in the prior-year period.
The company operates 671 warehouses, 474 in the U.S. and Puerto Rico, 88 in Canada, 34 in Mexico, 26 in the United Kingdom, 20 in Japan, 11 in Korea, 10 in Taiwan, 7 in Australia and 1 in Spain.
Costco currently 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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