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Costco Shares Edge Higher After March Sales Beat, Wall Street Upgrades

Costco books $18.21 billion in sales over the five weeks ended April 4, powered by non-food items and sporting goods.

Costco Wholesale  (COST)  shares edged higher Thursday amid a host of Wall Street upgrades following stronger-than-expected March sales data from the bulk discount retailer.

Costco said net sales for the five-week period ended April 4 rose 17.6% from last year to $18.21 billion, even as the Easter holiday removed one shopping day from the comparable period, adding to a 31-week total of $111.37 billion that was more than 15% higher than the same period last year. Same-store sales for March were up 16%, Costco said, while e-commerce sales surged 57.7%.

"We suspect U.S. trends, similar to others, likely benefited somewhat from recent government stimulus, but it is difficult to quantify precisely," said Oppenheimer analyst Rupesh Parikh, who boosted his price target on the group by $30 to $400 a share. "Costco remains a top pick for us, but we still believe investors should take advantage of weakness vs. chasing strength as a volatile trade likely continues amidst upcoming difficult comparisons."

Analysts at Jefferies also lifted their price target on Costco to $410 from $405, while Deutsche Bank bumped it $6 higher to $350 a share.

Costco shares were marked 1.75% higher in early trading Thursday to change hands at $365.32. That still leaves the stock down 3% for the year, however, in-line with downside moves for its larger rival Walmart  (WMT)  but lagging the 15.8% gain for Target  (TGT) .

Last month, TheStreet's founder, Jim Cramer, argued that plans to open a slew of new stores over the second half of the year should continue to support the group's top and bottom lines, adding that "there are now 108 million cardholders, most of whom would gladly pay more if they were asked given how much they save by shopping there."

Costco's fiscal second quarter, which ended on Feb. 4, was hit by a 41 cent charged linked to wage increases and COVID safety costs that offset a 15% increase in overall revenues, to just under $44 billion, and a 13% increase in same-store sales. 

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