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Costco reported robust March same-store gross sales. April’s numbers come out Wednesday.
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Costco
Wholesale will report April same-store gross sales knowledge on Wednesday—and analysts predict one other blowout quarter for the discounter, regardless that that energy hasn’t helped the inventory a lot.
Shares of Costco (ticker: COST) ended Monday up 1.9%, at $379.32. The inventory is simply 0.3% larger yr to this point however has climbed greater than 24% up to now yr. In early April, Costco reported robust March same-store gross sales.
Guggenheim analyst John Heinbockel estimates that core comparable gross sales, which excludes fluctuations from overseas change and gasoline, can be up 25%, “effectively above even the height Covid-driven performances final yr (17%).”
Heinbockel sees three catalysts driving this energy. First, Costco nonetheless has momentum each in consumable and discretionary classes, as shoppers flock to its worth pricing. Second, April represents its best month of year-over-year comparisons: In 2020, April gross sales have been roughly flat as a result of shoppers rushed to inventory their pantries in March after the primary wave of pandemic-related lockdowns have been introduced. Lastly, he estimates that the timing of Easter will add about 3.5% to April’s gross sales development.
Taken collectively, Heinbockel notes {that a} robust April displaying “bolster[s] the case for a big fiscal third-quarter bottom-line beat on Might 27.” Nonetheless, he’s conserving maintains his Impartial score on the inventory, given valuation.
Against this, Telsey Advisory Group’s
Joseph Feldman
reiterated an Outperform score and raised his value goal to $390 from $375. He’s modeling for core comps to climb 19.5% final month.
Feldman additionally believes the corporate will profit from the shift in Easter, in addition to straightforward comparisons. “Total, we count on one other stable month-to-month gross sales report, highlighting Costco’s excessive member loyalty, give attention to worth, and ongoing enchancment in digital.”
Write to Teresa Rivas at [email protected]
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