Costco Wholesale announced that its same-store sales have rebounded in July, bringing an end to a two-month negative streak.
Positive Growth in Same-Store Sales
The retailer reported a 2.5% increase in same-store sales compared to the previous year. This marks a significant improvement after experiencing a decline of 1.4% in June and 0.3% in May. Despite a 3.4% decrease in average worldwide transactions, Costco managed to achieve a 5% increase in same-store sales when excluding the impact of gasoline prices and foreign exchange.
Improved Net Sales Performance
July also saw a boost in net sales, which rose by 4.5% year over year to reach $17.6 billion. This is a substantial improvement compared to the 0.4% increase in June and the 1.2% rise in May.
Food Sales Continue to Drive Growth
Consistent with previous months, the strength in food sales has helped offset softer demand in other product categories. Among non-food products, sporting goods, housewares, and lawn and garden were identified as the weakest areas.
Positive Stock Performance
Despite soft revenue trends in recent months, Costco's stock has performed exceptionally well. It has increased by 21% this year, surpassing the S&P 500's gain of 18%.
Analyst Rupesh Parikh from Oppenheimer remains optimistic about Costco's prospects and its ability to drive comp re-acceleration in the coming quarters.
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