Is Costco's Winning Streak Built To Last During Economic Turmoil?

As retailers grapple with changing consumer behaviors in an uncertain economy, Costco Wholesale Corp COST impressive sales performance in June highlights a significant shift towards value-driven shopping. This development not only reinforces Costco’s strong market position but also signals to investors that even in challenging times, companies that prioritize customer loyalty and offer competitive pricing can thrive.

Costco reported strong sales for June, with a headline comp of 5.8%, which is better than the estimated 4.5%, according to Telsey Advisory Group.

The Costco Wholesale Analyst: Analyst Joseph Feldman reiterated an Outperform rating and price target of $1,100.

The Costco Wholesale Thesis: The company's core merchandise comp, which excludes gas and forex headwinds, "came in at a robust 6.2% vs. our projection of 5.0%," Feldman said in the note.

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Core US comp was 5.5%, while core Canada comp came in at 7.9% and core other international comp stood at 8.2% in June, he added.

Total traffic grew 3.4%, with consumers continuing to "search for value," while the average ticket rose 2.4%, with strength across the store. E-commerce sales grew 11.5%, compared to 18.4% last year, the analyst stated.

Costco Wholesale “continues to execute well in this uncertain operating environment" and is likely to remain "a profitable share gainer, with its solid sales and high membership renewal rates," he further wrote.

COST Price Action: Costco Wholesale shares were down 0.54% at $976.75 at the time of publication Thursday, according to Benzinga Pro.

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