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Costco sales rise 1% in July
Costco Wholesale Corp. said sales for the four weeks ended Aug. 2 increased 1% to $8.6 billion, with comparable sales rising 7%.
Excluding the negative impact of gasoline price deflation and foreign exchange, comps rose 6% in the U.S. in July and 7% outside the U.S., with sales of food and sundries increasing in the mid single-digit range, led by sundries, liquor and deli.
For the 48-week period, sales increased 3% to $105 billion, with comps up 7% in both the U.S. and international segments.
The Issaquah, Wash.-headquartered company said average transaction size was down approximately 4.3% and traffic was up 4% in July, while cannibalization had a negative impact on total comps of approximately 20 basis points.
With Labor Day falling one week later than a year ago, the company said it anticipates a negative impact for the month of August and a slight benefit for September.
Kelly Bania, an analyst with BMO Capital Markets, New York, said July’s results were solid, “[which is] particularly impressive given the barrage of sale events during the month from Amazon and Walmart,” noting the online sale activity may have impacted Costco’s consumer electronic sales, which were slightly negative in July.
However, she said the overall results “continue to support our view that Costco’s membership-based model provides the company with a rare barrier within the fast-changing U.S. retail landscape.”
John Heinbockel, managing director for Guggenheim Securities, New York, said he regards Costco as “one of retail’s most sustainable growth stories,” though he added he expects the shares to be impacted in the near term by challenges from foreign exchange and the cycling of record gas margins.
Source: supermarket news