Costco Wholesale Executes Well In Tough Operating Environment, Analyst Says - Costco Wholesale (NASDAQ:COST)

Telsey Advisory Group analyst Joseph Feldman reiterated an Outperform rating on the shares of Costco Wholesale Corporation COST and a price target of $580.
The analyst said Costco reported a better-than-expected December comparable sale of 5.5% versus the forecast of 1.3%.
Excluding the gas (+20 basis points) and FX (-200 basis points) net headwind of ~180 basis points, the core merchandise comp came in at 7.3%, more than double the projection of 3.5%.
All three segments reported solid comparable sales, the analyst noted.
The analyst said that Costco continues to generate strong results, reflecting high member loyalty, its focus on value, and digital improvements.
In December, total traffic increased 4.6% (U.S. +3.6%), and the average ticket rose 1.0%. The company noted a slight sequential decrease in inflation in food & sundries and fresh foods from November.
E-commerce sales decreased 6.4% against 17.8% growth last year.
The analyst projects January comparable sales of 4.0% versus 14.2% last year.
The analyst estimates a gas and FX net headwind of ~200 bps, assuming the latest prices and rates.
Costco continues to execute well in a tough operating environment and should remain a share gainer, with its solid sales and high membership renewal rates, said the analyst.
Also Read: 4 Costco Analysts On Q1 Earnings Miss: 'Consumables Strength And Improving Membership'
Price Action: COST shares are trading higher by 6.59% at $479.88 on the last check Friday.
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