Warehouse chain Costco (NASDAQ:COST) reported strong sales numbers for the retail month of September (five weeks ended October 2, 2022), reflecting the company’s ability to thrive even in a challenging macro backdrop. Costco’s September net sales grew 10.1% year-over-year to $21.46 billion.
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Comparable sales were up 8.5%, with sales growth in the U.S. and Canada offsetting the decline in sales from international markets. The company’s comparable e-commerce sales growth came in at 0.7%. Excluding the impact of changes in gasoline prices and foreign currency, Costco’s September comparable sales grew 8.6%, while e-commerce comparable sales were up 2.3%.
The membership-only retailer’s September net sales slowed down compared to the August sales growth of 11.4%. However, the slow down can be attributed to cooling down of gasoline prices in September. Aside from selling merchandise in bulk to its members, Costco also generates revenue through its self-service gasoline stations at several domestic and international locations.
Costco stock advanced slightly in Wednesday’s extended trading session in reaction to the September sales update. Shares are down 15.4% year-to-date. Last month, Costco reported better-than-anticipated results for the fiscal fourth quarter, reflecting consumers’ preference to shop at the company’s warehouses due to affordable prices.
Is Costco a Buy or Sell?
Costco stock scores a Strong Buy consensus rating based on 17 Buys and four Holds. The average COST stock price target of $558.75 implies 16.3% upside potential from current levels.
As per TipRanks’ Smart Score System, Costco earns a nine out of ten, implying the stock could likely outperform market averages in the long-term.
