economy
Costco delivers another strong sales month, even as a question mark hangs over the stock
It's difficult to dispute Costco's leadership as a preferred retailer among consumers. But one metric has been a torn in investors' side.
TL;DR
- Costco reported a 13% increase in total sales to $23.92 billion for April.
- Comparable sales grew by 11.6%, boosted by an extra shopping day and strong underlying demand.
- US core comparable sales, excluding gas and foreign exchange, rose 8%.
- Increased foot traffic and higher average transactions contributed to sales growth.
- Investor focus is on membership renewal rates, which have drifted lower, particularly for online customers.
- Costco benefits from higher gas prices due to increased warehouse traffic.
- Other categories like food, fresh foods, and nonfoods also showed positive growth.
- Analysts predict EBIT margin expansion and see potential for another special dividend.
- Domestic renewal rates were above 92% as of the fiscal second quarter.