Costco Revenue Growth Remains Enviable Over Other Retail Giants

July 10, 2019 by Jon C. Ogg

Costco Wholesale Corporation (NASDAQ: COST) still reports monthly sales figures. While some of the June data for monthly sales is lower than trend in the United States, this might still be rather enviable at a time when so many retailers are feeling the squeeze of the economy and from tariff-driven concerns.

Costco reported net sales of $14.57 billion for its retail month of June, which is shown to be the five weeks ended July 7, 2019. This was an increase of 7.5% from the $13.55 billion last year. And for the 44 weeks ended July 7, 2019, Costco reported that net sales of $126.13 billion were 8% higher than the $116.81 billion for the similar period a year earlier.

As far as why the sales growth is weaker in the U.S., the June trend for comparable U.S. sales was 6.3% for June versus 8.0% for the last 44-week period. For the same periods under comparison, Canada’s comparable store sales were up 2.8% for the month versus 2.1% for the 44-weeks; and “other international” comparable store sales were up 3.1% for the month versus 2.1% for the 44-week period.

Costco also showed that e-commerce sales were up 15.7% for the June report, but that is under the 44-week period gain of 23.2%.

Backing out sales excluding changes in gasoline prices, foreign exchange, and a previously disclosed accounting change concerning revenue recognition, Costco’s domestic same store sales were up by 5.3% for June and up 6.5% for the 44-week period. And backing out those items, e-commerce sales were up 20.8% in June and up 23.2% for the 44-week period.

Breaking out the regional data is easy within North America, but it is harder to evaluate versus the rest of its global operations. Of the 776 warehouses it operates, it has 539 in the United States and Puerto Rico and another 100 in Canada and 39 in Mexico. It operates 28 stores in the United Kingdom, 2 in Spain and 1 store each in France and Iceland. In the Asia-Pacific operations, there are 26 stores in Japan, 16 in Korea, 13 in Taiwan, and 11 in Australia.

Costco’s e-commerce site operations are in the United States and Canada, the United Kingdom, Mexico, Korea, and Taiwan.

As a reminder, Costco’s current fiscal year revenues are projected to be up by almost 8% to $152.73 billion and up another 7% to $163.4 billion next year per the Refinitiv consensus analyst estimates.

After closing up 0.5% at $271.42 on Wednesday, Costco has a 52-week trading range of $189.51 to $271.53. That 52-week high was also seen on this same day and represents and all-time high for its shares. Costco’s market cap is $119.4 billion and the Refinitiv consensus analyst target price is $253.92.

Its shares were last seen trading up about 29% year-to-date, versus about 19.5% for the S&P 500.

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