Costco Sales Surge

Retail

Published: April 11, 2024 6:35 am

Costco Wholesale Corp. (NASDAQ: COST), one of the few national retailers that charge shoppers membership fees to shop online or in its stores, has posted a large increase in sales for March. Online sales surged.

For the five weeks that ended April 7, revenue rose 9.4% to $21.5 billion. Comparable store sales rose 7.7%. E-commerce sales jumped, up 28.3%. That compares to a 14.8% e-commerce increase for the 31 weeks that ended the same day. Easter was a tiny contributor. It was in April last year and March this year. That positively affected sales by 0.5%, which does not explain the increase in e-commerce.

Costco’s recent success has been overshadowed by news of gold bar sales and a weight loss partnership it set with health care provider Sesame. The weight management service may lead people to buy expensive medical injectables, which have recently been shown to help with weight loss. The weight loss program is available to Costco members and non-members. (Check out other little-known perks of shopping at Costco.)

It is not entirely clear why Costco’s sales have been so strong in the past month. The increase is ahead of those reported in the most recent quarter by rivals Walmart and Target, although neither has reported sales for the same period Costco has just done.

Costco’s stock has had an impressive run-up in the past year, rising 46%, compared to the S&P 500’s 26%. Why were Costco’s March sales so impressive? Certainly, they will help support the stock price.

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