Normally we might skip an analyst report discussing coupon usage and streamlining efforts that only a small percentage of consumers will take advantage of. But when it comes to Costco Wholesale Corp. (NASDAQ: COST), we know this matters. Millions of its members can effectively have a better and easier time saving money because of some recent changes that the company has implemented in its coupon policies and actions. That is great for customers, and Costco will likely see incrementally higher product sales as well.

Sterne Agee’s Charles Grom and Renato Basanta have maintained a Buy rating and a $130 price target on Costco. The analyst team here noticed what it calls important changes in Costco’s August Multi-Vendor-Mailer. The analysts said that Costco has streamlined the process for customers to take advantage of savings included in the mailer, and they now believe that these changes should 1) help speed up the checkout process and 2) help drive better overall sales.

Wall Street might not care about how long a checkout line, so long as it doesn’t crimp the desire for customers to return. But higher sales, that is effectively a juicing up entry point for higher same-store-sales. The analysts said,

“Under the old format, there were three types of coupons provided in the mailer – instant savings, online-only, and manufacturer’s coupon. As the name implies, customers automatically took advantage of instant savings coupons when purchasing a product that had a coupon of this type. Likewise, online-only coupons could only be applied to purchases of particular products at costco.com. For the third type, manufacturer’s coupons, customers had to physically cut out each coupon and present it to cashier upon check out. For some perspective on the breakdown, last year’s August Mailer consisted of 56 instant coupons, 20 online-only coupons, and 28 manufacturer’s coupons, for a total of 104 coupons.”

Here are the changes that have been made in the coupon policies:

• customers no longer need to cut out manufacturer’s coupons to take advantage of the cost savings;
• customer’s can present a copy of the mailer, which under the new format, has a Master Bar Code on the first page which can be scanned to take advantage of all non instant savings;
• and customers also have the option of using a barcode on their Costco app on their smartphones.

The Sterne Agee team showed that there are 18 products in the August mailer that are not instant savings and indicate with a blue arrow that reads “Book or App Required”. This will allow cashiers to now only need to scan the book or phone one time. The big point is that it is going to be easier for customers to maximize their savings with less of a hassle.

One thing that the team pointed out, which may or may not make sense, is that additional mailers will no longer be available at warehouses. In addition to the 18 non instant savings coupons, August’s MVM had 24 online-only coupons and 89 instant savings.

If you have been to Costco, the biggest issue is that getting there in the middle of a weekend day can be an excruciating checkout time. Usually its long lines move fast, but customers really want to get out and the self-checkout lines are still not completely embraced by consumers.

Maybe this is too much of an “inside baseball” analysis, but Costco shares are effectively at an all-time high. Shares are currently around $119.50, and the consensus analyst target price is only $116.22. Sterne Agee’s $130 price target compares against a highest price target of $132 for Costco’s stock price.

Costco’s stock market capitalization is already $52 billion. Its major growth phase has been seen because the company shows that it currently operates 629 warehouses and plans to open only another five new warehouses before he end of this fiscal year (September 1). It has 450 warehouses in the United States and Puerto Rico, so here is a breakdown of its other warehouse geographies: 85 in Canada, 33 in Mexico, 25 in the United Kingdom, 15 in Japan, 9 in Taiwan, 9 in Korea, and 3 in Australia.

Once stocks are at all-time highs and once their major growth phase has played out, they keep having to improve and increase their internal metrics to keep investors interest. Even if you might be fighting to go buy Costco’s stock right now, at least saving money at the register just got a little easier.

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