Costco Wholesale Corp. (COST) - Get Costco Wholesale Corporation Report shares edged higher Thursday after the bulk discount retailer posted much stronger-than-expected sales data for the month of September.
Costco said net sales for the five weeks ending on October 5 were up 16.9% from last year at $16.84 billion, while comparable store sales surged by a much better-than-expected 15.5%. E-commerce sales, Costco said, rose by staggering 90.3% from last year as customers increasingly used online shopping, as well as curbside pickup, to buy home-based staples amid the coronavirus pandemic.
"September sales were positively impacted by two holiday shifts, Labor Day in the U.S. and Chuseok/Moon Festival in Asia," Costco said in a statement. "The estimated positive impact on September sales was slightly less than 100 basis points worldwide, half relating to each holiday."
Costco shares were marked 0.35% higher at $364.29 each in early New York trading Thursday, a move that lifts the stock's six-month gain to around 18.8%
The September sales figures extended a trend the Costco updated last month with stronger-than-expected fiscal fourth quarter earnings of $3.04 per share, a 13% increase from last year, as revenues reached $52.3 billion thanks in part to the best same-store sales increase in two decades.
"Two-year US comp trends excluding calendar benefits again strengthened to +21.9% from +21.0% in August, which clearly represents a stand-out delivery in a slowing US grocery retail backdrop," said Oppenheimer analyst Rupesh Parikh, who carries a $400 price target with an outperform rating for the stock.
"We were surprised by the acceleration in both US trends and the food category, which suggests more share gains in the grocery category," he added. "Costco continues to remain a top pick for us and we still see the potential for a $10–15 special dividend next year."