Costco Wholesale (COST) released robust sales figures for both its Fiscal first quarter and the month of November, showing strong momentum ahead of its December 11 earnings report. The wholesale retailer reported that its growth is being powered by a significant jump in its e-commerce business.
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Fiscal first-quarter sales reached $65.98 billion, an impressive increase of 8.2% from a year ago. Total company same-store (comparable) sales for the quarter grew by 6.4%, surpassing analysts’ expectations of a 5.8% increase.
Costco’s Digital Sales Jump 20.5% in Key Growth Area
The biggest catalyst for the strong performance was the company’s digital business. Digitally enabled comparable sales for the first quarter skyrocketed by 20.5%. This jump reflects how Costco is finally making major progress in e-commerce, despite its historical reputation for being slow to adopt online retail.
The overall sales strength continued into the latest reporting period. Net sales for November reached $23.6 billion, marking an 8.1% year-over-year increase. This monthly figure included Black Friday weekend revenue and showed that foot traffic—or comparable traffic—increased 3.8% worldwide, while the average transaction size rose by 3%.
Top Categories and Stock Performance
Costco saw particularly strong performance in several core categories, including candy, food, sundries, meats, bakery, jewelry, and health and beauty.
Despite the strong sales results, Costco stock dipped slightly by 0.5% in after-hours trading. Shares are roughly flat this year, gaining only about 1% while the S&P 500 index (SPX) has increased by 16%. The upcoming earnings report on December 11 will include revenue from the company’s key membership fees, which will be a key focus for investors.
Key Takeaway
Costco’s impressive sales growth of 8.2% and massive 20.5% jump in digital sales confirm that its core business is executing strongly. The immediate focus for investors now shifts to the December 11 earnings report, where the company will disclose revenue from its highly important membership fees.
What Is the Price Prediction for Costco Stock?
Turning to TipRanks, analyst sentiment toward Costco (COST) is rated as a Moderate Buy, based on the consensus of 24 analysts tracked in the last three months. Of these ratings, 16 analysts call it a Buy, eight recommend a Hold, and 0 recommend a Sell.
The average 12-month COST price target sits at $1,091.61. This target implies an upside potential of 18.36% from the last price.
