Costco Wholesale (COST) Posts Positive Comps in December

Costco Wholesale Corporation COST continues to impress investors with positive comparable-store sales (comps) for the fourth month in a row. Comps for the five-week period ended Jan 1, 2017 increased 3%, following an increase of 1% in November, 2% in October and 1% growth in September. The company generated net sales of $13.07 billion in December, up 5% year over year. Notably, net sales increased 3%, 4% and 3% in November, October and September, respectively.

We note that shares of Costco have climbed 6.5% since Oct 5, 2016, when the company reported September sales results. However, the stock has increased only 0.9% in the past one year, underperforming the Zacks Categorized Retail-Wholesale sector which witnessed an increase of 5% in the same time frame.

Comps for December reflect an increase of 3% and 7% at the U.S. and Canadian locations, respectively. However, the company witnessed a 2% decline in comps at Other International locations. Excluding the impact of foreign currency fluctuations and gasoline prices, Costco’s comps for the month under review rose 3%. It recorded comps increase of 3%, 4% and 4% across its U.S., Canadian and Other International locations, respectively.

For the 18-week period ended Jan 1, 2017, Costco reported 2% rise in comps, reflecting an increase of 1% and 5% at its U.S. and Canadian locations, respectively, and a decline of 1% at International locations. Net sales for the period came in at $43.18 billion, an increase of 4% from year-ago period.

Costco currently operates 723 warehouses, which include 506 in the U.S. and Puerto Rico, 94 in Canada, 36 in Mexico, 28 in U.K., 25 in Japan, 12 in Korea, 12 in Taiwan, eight in Australia and two in Spain.

Zacks Rank

Costco currently carries a Zacks Rank #3 (Hold). Investors may consider better-ranked stocks such as Burlington Stores, Inc. BURL flaunting a Zacks Rank #1 (Strong Buy), and Kohl's Corporation KSS and Ross Stores, Inc. ROST, both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Burlington Stores delivered an average positive earnings surprise of 25.6% in the trailing four quarters and has a long-term earnings growth rate of 19.9%.

Kohl's delivered an average positive earnings surprise of 6.2% in the trailing four quarters.

Ross Stores delivered an average positive earnings surprise of 5% in the trailing four quarters and has a long-term earnings growth rate of 10.5%.

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