(Bloomberg) — Costco Wholesale Corp. is heading for its biggest gain since March 2020 after improving December sales soothed investor concerns about a slowdown in November.
(Bloomberg) — Costco Wholesale Corp. is heading for its biggest gain since March 2020 after improving December sales soothed investor concerns about a slowdown in November.
Excluding the impact of changes in gasoline prices, Costco’s US comparable sales climbed 6.4% last month, topping the 5% average of analyst estimates compiled by Consensus Metrix. In November, the closely followed sales gauge only rose 4.6%, the smallest gain since April 2020.
“This is the first major retailer to provide an indication of December results, and the rebound versus November to better-than-expected comps endorses the theory that holiday sales came late in 2022 after a slow start in November,” Michael Baker, an analyst at D.A. Davidson & Co., said in a note to clients.
The warehouse club is benefiting from resilient demand as customers spend heavily on food while also snapping up items such as sporting goods and tires. Still, doubts remain about the durability of the sales gains, and Stifel Financial Corp. analyst Mark Astrachan cautioned that Costco’s upbeat month offers only a limited view of the state of US consumers amid lower purchases of discretionary products.
Costco shares climbed 7.1% at 2:46 p.m. in New York, on track for the biggest daily gain since March 2020. Costco tumbled 20% last year, the worst decline since 2008.
(Updates share move in first paragraph)
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