Costco Wholesale Corporation COST recently came out with its comparable-store sales (comps) results for the month of July that fared better than analysts’ expectations. The warehouse retailer reported flat comps for the month, following a decline of 1% in June. Comps for July reflect an increase of 3% at the company’s U.S. locations, offset by a decline of 10% at international locations. Shares rose marginally by 1.1% since the announcement.
However, excluding the effect of deflation in gasoline prices and the adverse impact of foreign currency fluctuations, Costco’s comps for the month under review rose 7%, portraying comparable sales growth of 6% and 7% across its U.S. and international outlets, respectively.
Other retailers such as Zumiez, Inc. ZUMZ recorded comps decline of 7.6%, while Rite Aid Corporation RAD witnessed comps growth of 2.4% in July.
On the sales front, this Zacks Rank #3 (Hold) company reported an improvement of 1% in net sales to $8.64 billion for the four-week period ended Aug 2, 2015. We observe that the rate of increase was on par with that in the month of June. However, it has decelerated from 2% registered in both May and April.
Coming to Costco, comps for the 48-week period increased 1%, buoyed by a rise of 3% across its U.S. locations, offset by a 4% decline at the international locations. Excluding the effect of gasoline prices and foreign currency fluctuations, comps for the period jumped 7%, depicting an equivalent percentage increase at the U.S. and international locations. Net sales for the 48-week period improved 3% to $104.95 billion.
Costco, which competes with Wal-Mart Stores Inc. WMT, currently operates 680 warehouses, which include 480 in the U.S. and Puerto Rico, 89 in Canada, 36 in Mexico, 26 in the U.K., 20 in Japan, 11 in Korea, 10 in Taiwan, 7 in Australia and 1 in Spain. Costco plans to open 6 more warehouses before the end of the fiscal year on Aug 30, 2015.
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