Costco continues to outpace broad retail in good economic times and bad
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Costco Wholesale Corporation (NASDAQ:COST) continued to outpace broad retail with a comparable sales jump of 18% in June. The core comparable sales gain of 13% is more than double the estimated 6% core retail sales growth rate in the U.S. to continue a trend of outperformance.
Evercore ISI said Costco's (COST) results remain strong on a long-term basis, noting the gas sales kicker and rising average ticket on inflationary pass through.
Analyst Greg Melich's breakdown: "After adjusting for the calendar shift, traffic of 8.2% compares to the 7.5% trend globally. U.S. traffic of 6% compares to the 6.5% trend YTD. Gas inflation drove a 7.4% comp ticket boost, with a noteworthy aid to instore traffic using historic relationships between pump traffic and in store conversion."
The firm continues to see Costco (COST) as well positioned in an inflationary backdrop to grow traffic and win share. Melich and team also think the impressive traffic trends, steady share gains, and record loyalty rates are reasons for COST to merit its premium valuation. Looking ahead, dual catalysts are seen for 12-month to 18-month outperformance from a potential membership fee increase and special dividend paid out to shareholders.
Shares of Costco Wholesale Corporation (COST) rose 0.42% premarket to $497.02 following the comparable sales report.