Costco's Comps Rise - Analyst Blog
11 Febbraio 2013 - 3:48PM
Zacks
Costco Wholesale Corporation (COST), the
leading U.S. warehouse club operator, posted healthy
comparable-store sales data for the five-week period ended Feb 3,
2013 that marginally betters analysts’ expectations. Sales for the
month were negatively affected by changes in gasoline prices but
favorably by foreign currency fluctuation.
After an increase of 9% in December, Costco’s comparable-store
sales for January climbed 4%, reflecting comparable sales growth of
3% at its U.S. locations and 5% at international outlets. In the
prior-year period, the company delivered comparable-store sales
growth of 8%.
In terms of performance, this Zacks Rank #3 (Hold) stock fared
better than its nearest competitor, Target
Corporation (TGT) that came up with a 3.1% increase in
comparable-store sales. Jan 2013 was strong on the whole for most
retailers, with players such as Kohl's Corp.
(KSS), Nordstrom Inc. (JWN) and Stage
Stores Inc. (SSI) registering comparable-store sales
growth of 13.3%, 11.4% and 10.5%, respectively.
Costco’s comparable-store sales for the 22-week period ended Feb
3, 2013 rose 6% buoyed by a 6% and 7% jump in comparable-store
sales in the U.S. and international locations, respectively.
Excluding the effects of gasoline prices and foreign currency
fluctuations, Costco’s comparable-store sales for January rose 4%
with U.S. and international comparable-sales elevating 4% and 3%,
respectively. For the 22-week period, the company witnessed
comparable-store sales growth of 5%, with U.S. and international
sales rising 6% and 5%, respectively.
Total net sales for January grew 7% to $9.35 billion from $8.74
billion in the year-ago period. Costco’s sales for the 22-week
period increased 9% to $43.77 billion from $40.18 billion in the
year-ago quarter.
The five-week period ended Feb 3, 2013 has one less day compared
with the prior-year period on account of the timing of the New
Year's holiday. This led to a decrease of approximately 2% in total
and comparable-store sales.
A differentiated product range enables Costco to provide an
upscale shopping experience to its members, resulting in market
share gains and higher sales per square foot. Moreover, the company
continues to maintain a healthy membership renewal rate.
Costco also remains committed to opening new clubs in domestic
and international markets. The company’s diversification strategy
is a natural hedge against risks that may arise in specific
markets.
However, Costco faces stiff competition from Target and Sam’s
Club, a division of Wal-Mart Stores Inc. (WMT),
which follows a similar business model that pushes through high
volumes of merchandise at low prices in membership-only warehouse
clubs. Thus, aggressive pricing to gain market share and drive
traffic amid stiff competition may depress sales and margins.
Costco currently operates 622 warehouses, comprising 448
warehouses in the United States and Puerto Rico, 85 in Canada, 32
in Mexico, 23 in the United Kingdom, 13 in Japan, 9 in Taiwan, 9 in
Korea, and 3 in Australia. The company now targets 14 more new
warehouses before the end of fiscal 2013.
COSTCO WHOLE CP (COST): Free Stock Analysis Report
NORDSTROM INC (JWN): Free Stock Analysis Report
KOHLS CORP (KSS): Free Stock Analysis Report
STAGE STORES (SSI): Free Stock Analysis Report
TARGET CORP (TGT): Free Stock Analysis Report
WAL-MART STORES (WMT): Free Stock Analysis Report
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