ISSAQUAH, WA – A significant boost in sales growth and same-store sales hasn’t lent the usual spike to Costco’s stock, and analysts are attributing it to the resonating effects of Amazon’s proposed purchase of Whole Foods Market.
Investor’s Business Daily reports that despite 7% sales growth in June to $12.17 billion and 6.5% in same-store sales growth for the month excluding gas prices and currency, Costco shares fell 0.6% to 157.09 in the stock market today after trading at 161.35 soon after the market open.
Despite the slip, investors continue to have faith that Costco will hold its own, according to the report, which noted that the retailer’s June results did bolster Wall Street's confidence.
"We also think the results indicate Costco can coexist with large hard line competitors like Walmart and have limited cannibalization from Amazon," wrote Managing Director at Stifel Financial, Mark Astrachan, late Wednesday.
Highlights Stifel noted for the five-week period in June include:
- U.S. same-store sales growth of 6.3%, above consensus of 3.7%
- Core Canada comps rising 6.8%
- A growth of 7.1% for other international comps
Costco currently owns 734 warehouses worldwide, with 511 in the U.S. and Puerto Rico.
BMO Capital Markets analyst Kelly Bania called Costco’s U.S. comp including 4.5% U.S. customer traffic "particularly impressive," adding, "considering the continued challenging trends experienced across other parts of retail and Amazon fears."
With the retailer’s July sales results due August 2nd, and its over Q4 report the first week of October, AndNowUKnow will report how the Street receives Costco as the buy-side continues to shake out.
