The company’s standout items were computers, appliances, tires and gardening items as it handily exceeded analysts’ expectations with an increase of more than 6 percent in comparable sales.
Showing it needn’t yet fear death by Amazon, Costco on Wednesday reported sales growth in June that far exceeded analysts’ expectations.
Sales at Costco stores in the U.S. open at least a year grew 6.3 percent in June from the same month last year, excluding the impact of fluctuating gas prices and foreign exchange.
Companywide, sales rose 6.5 percent, the Issaquah-based warehouse retailer said.
That was far greater than the consensus estimates of 4.3 percent growth in the U.S., and 4.7 percent companywide, as compiled by Consensus Metrix.
“Six percent growth in the US is very impressive,” John Heinbockel, an analyst with Guggenheim Partners, wrote in a research note Thursday, contrasting Costco with “an increasing number of retailers struggling to grow their brick & mortar” sales.
In total, Costco reported net sales of $12.17 billion for the five weeks ended July 2, up 7 percent from last year.
Among the standout items were computers, appliances, tires and gardening items.
The result in the U.S. was “notable” because it followed the company’s membership fee hike on June 1, Michael Lasser, an analyst with UBS, said in a research note Thursday. “Now, it will have this added pool of profits from which it can use to invest back into the business. This is core to how Costco’s model works.”
In addition, the retailer’s traffic gains of 4.5 percent in the U.S. and 4 percent worldwide “suggest it is holding its own against online competition,” Lasser wrote. “While many retailers have faced increasing pressure from online retail, Costco’s latest results help serve as a reminder of just how powerful its membership model has become.”
Neil Stern, analyst for McMillanDoolittle, wrote that while no company is e-commerce resistant, “Costco probably took an unfair hit when Amazon announced their acquisition of Whole Foods.” Costco shares lost nearly 9 percent in the immediate aftermath of Amazon’s $13.7 billion deal last month.
Costco, which has been growing its e-commerce operations, albeit slowly, will likely be less affected in the short term as food and commodities increasingly move online, Stern wrote. “Costco will need a better e-commerce strategy but it will not prevent them from out-performing now.”