Costco Wholesale Corporation (COST – Free Report) concluded 2024 on a high note, delivering exceptional sales growth in December. The robust same-store sales growth with notable gains across key regions reflects Costco’s strategic focus on value and quality, which continues to resonate with its loyal customer base. This performance highlights the company’s operational excellence and adaptability, even amid shifting economic dynamics.
Decoding COST’s December Comps
COST’s comparable sales for December illustrate its market strength. For the five weeks ended Jan. 5, comparable sales in the United States grew 9.3%, while Canada and Other International markets saw increases of 4.3% and 1%, respectively. The total company comparable sales rose 7.4%. This follows consecutive increases of 3.1% and 5.1% in November and October, respectively.
When adjusting for the effects of gasoline prices and foreign exchange rates, Costco’s comparable sales paint an impressive picture. In the United States, comparable sales, excluding these factors, rose 9.8% in December, while Canada and Other International markets posted gains of 10.3% and 9.8%, respectively. The company’s total comparable sales, excluding these external factors, increased 9.9%.
Costco’s e-commerce comparable sales jumped 34.4% or 35.7% when adjusted for gasoline prices and foreign exchange fluctuations. Management informed that e-commerce sales were favorably impacted by an estimated 15 percentage points due to Thanksgiving, Black Friday and Cyber Monday taking place a week later this year compared to last year. This positively impacted total and comparable sales by approximately one and one-half percent.
As a result, Costco’s net sales for December increased 9.9%, reaching $27.52 billion, up from $25.03 billion in the same period last year. This follows a sales improvement of 5.6% and 7.2% reported in November and October, reflecting a strong and consistent sales performance in the past few months.
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Costco’s Consistent Growth Keeps Investors Optimistic
Costco’s resilient business model, centered around a membership-based structure, continues to be a major growth driver. The company’s high membership renewal rates, coupled with its efficient supply chain management and bulk purchasing power, ensure competitive pricing and customer loyalty.
Shares of this Zacks Rank #3 (Hold) company have advanced 37.8% in the past year compared with the Retail – Discount Stores industry’s rise of 21.9%.
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The Zacks Consensus Estimate for Freshpet’s current financial-year sales and earnings implies growth of 27.2% and 228.6%, respectively, from the prior-year reported levels.
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The Zacks Consensus Estimate for Sprouts Farmers’ current financial-year sales and earnings suggests growth of 12.2% and 29.6%, respectively, from the year-ago reported numbers.
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