Jim Cramer: Buy Some Costco Stock Now, 'Hope' It Comes Down
Costco 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."
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.
Jim Cramer gives investors advice on when they can initiate a position in Costco in the video above.
Latest Videos From TheStreet and Jim Cramer:
- Jim Cramer: Shutdowns Make Running NYC Small Business Impossible
- Looking for a FAANG Alternative? Here's Where a Monday.com Investor Finds Value
- PPE and Your Portfolio: Inside a Disruptive Industry
- Jim Cramer: You Have to Sell Movie Theater Stocks
- Don't Try to Price Stocks Around the Election: Here's Why
- What to Expect From the Markets Following a Trump or Biden Victory
- Airline Stocks Fly Higher on Hopes of More Fiscal Aid