Following the release of strong June sales figures, after the market closed on Thursday, Costco Wholesale Corp. (NASDAQ: COST) was seen trading 0.6% up in the pre-market session on Friday.
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Net sales increased 20.4% year-over-year to $22.78 billion in June from $18.92 billion a year ago.
This year, the five-week month brought one extra shopping day in the U.S., compared to June 2021. This boosted the retail giant’s total sales by almost 2% and U.S. sales by around 3%.
Total comparable sales for the five weeks ended July 3 grew 18.1%. U.S. comparable sales jumped 21.5%, comparable sales in Canada rose 14.2% and E-commerce sales grew 7%.
Excluding the foreign exchange and fuel price impact, total comparable sales increased 13% and E-commerce sales climbed 8.3% in June.
Meanwhile, Costco has reported net sales of $188.34 billion for the fiscal 44 weeks ended July 3, reflecting a year-over-year increase of almost 17% from $161.09 billion last year.
Total comparable sales for the period jumped 15.3%, while E-commerce sales soared 10.6%. Comparable sales rose 16.6% in the U.S. and 15.9% in Canada.
E-commerce sales climbed 10.8% and total comparable sales increased 11%, after excluding the impact of foreign currency and gas price hikes.
About Costco
Based out of Washington, Costco runs a retail store chain. The company has 833 warehouses, which include one in Iceland, two in China, two in France, four in Spain, 14 in Taiwan, 16 in South Korea, 13 in Australia, 29 in the UK, 107 in Canada, 31 in Japan, 40 in Mexico, and 574 in the U.S. and Puerto Rico.
The company reported excellent results for the fiscal third quarter that ended May 8. Net sales grew 16.3% year-over-year to $51.61 billion and earnings came in at $3.04 per share, higher than the year-ago figure of $2.75 per share.
Stock Rating
Last month, Atlantic Equities analyst Daniela Nedialkova maintained a Buy rating on Costco with a $615 price target (24.3% upside potential).
The analyst said, “The company’s unique business model, the stability of its membership income and the higher-income nature of its customer base make it more resilient in the face of inflationary pressures.”
On TipRanks, the stock has a Strong Buy consensus rating based on 16 Buys and three Holds. Costco’s average price forecast of $568.67 implies 15% upside potential from current levels.
Insiders are Neutral
TipRanks’ Insider Trading Activity tool shows that Insider Confidence Signal is currently Neutral on Costco, as corporate insiders sold COST shares worth $3.8 million in the last three months.
Concluding Thoughts
Like other sectors, retail has also been hit hard by market volatility. This can be seen from the fact that COST stock has lost 17.4% over the last three months and 12.4% year-to-date, even after reporting solid results for the first three quarters of the current fiscal year.
June sales results have made investors hopeful about another strong quarter from the company. Any decline in Costco’s stock price could be considered as an investment opportunity.
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