Club holding Costco Wholesale (COST) posted strong sales growth in December, demonstrating the retailer’s ability to consistently attract customers despite looming economic headwinds. In the 5 weeks ended Jan. 1, Costco’s net revenue increased 7% year-on-year to $23.8 billion, the company said on Thursday. Total comparable sales, which exclude the impact of fluctuations in gasoline prices and foreign exchange rates, rose 7.3% in December, beating Wall Street’s expectations for 5.7% growth. Costco shares rose almost 7% at noon on Friday, to about $481 a share. Costco’s December sales were related to groceries and miscellaneous merchandise, followed by fresh groceries. Meanwhile, sporting goods, tires and apparel performed best, while consumer goods such as electronics and household goods performed worse. Costco’s e-commerce sales were down 5.4% from an 8.9% drop in November. This coincided with stronger global store traffic in December, which increased 4.6% year-on-year compared to 3.4% growth in November. In Friday’s research note, UBS analysts consistently hailed Costco’s “strong improvement” but said they “expect demand to remain volatile in the near term as consumers continue to face higher costs and a drain on savings.” However, analysts say the retailer “should be well positioned in this environment and … see upside potential for the stock at current levels.” The Club Take Costco released a softer November sales report, with sales up 5.7% year on year, raising concerns about a slowdown in consumer spending. This put pressure on stocks, which were down more than 9% last month. But the wholesale retailer’s rise in sales in December shows that Costco is still delivering value to its members, especially during the height of the holiday shopping season. While Costco isn’t immune to inflationary pressures squeezing consumers, the company has a stellar management team that consistently reports sales growth. We also expect a potential increase in membership dues and a special dividend this year, two possible positive catalysts for the stock. We claim that Costco is the best retailer in the world, serving both customers and shareholders with excellence. (The Jim Cramer Charitable Foundation has a LONG VALUE. See the full list of stocks here.) As a CNBC Investing Club subscriber with Jim Cramer, you will receive a trade notice before Jim completes the trade. Jim waits 45 minutes after sending a trade notice before buying or selling shares in his charitable foundation’s portfolio. If Jim was talking about a stock on CNBC, he waits 72 hours after a trade alert is posted before making a trade. THE ABOVE INFORMATION ABOUT INVESTMENT CLUB IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, TOGETHER WITH OUR DISCLAIMER. NO FIDUCIARY OBLIGATIONS OR OBLIGATIONS ARE OR ARISING IN CONNECTION WITH YOUR RECEIVING ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTMENT CLUB. NO SPECIFIC RESULT OR PROFIT IS GUARANTEED.
sopa images | Light rocket | Getty Images
Club holding Costco wholesale (COST) posted strong sales growth in December, demonstrating the retailer’s ability to consistently attract customers despite looming economic hardships.
Source link
Read More
-
-
-
L3Harris Technologies is still worth buying7 hours ago -
What you need to know about the Republican Plan11 hours ago
