Costco Rises After November Sales Top EstimatesBy
Warehouse retailer seen weathering heightened competition
Shares rise as much as 4%, the most in almost ten months
Comparable-store U.S. sales rose 8.4 percent in November, excluding gasoline. That beat analysts’ estimates and marked a 14th straight month of growth, sending shares on their biggest rally in 10 months.
“The results indicate Costco can coexist with large competitors like Wal-Mart and has limited cannibalization from Amazon,” said Mark Astrachan, an analyst with Stifel Nicolaus.
Costco and Wal-Mart Stores Inc. have stood out from other big U.S. retailers in their ability to withstand the encroachment of online giant Amazon, which Bain & Co. sees capturing half of e-commerce holiday spending growth. Membership-based Costco has exported its treasure-hunt shopping experience to new markets like Iceland and France this year, while improving its website via an improved search function, greater product selection and expanded same-day grocery delivery with Instacart.
The shares increased as much as 4 percent to $184.58, the most since Feb. 2.
Costco’s shopper traffic at its 518 U.S. locations rose 5.9 percent in November, an acceleration from the previous month and a testament to the “durability of the company’s business model,” Baird Equity Research analyst Peter Benedict said in a note.
E-commerce revenue increased 39 percent, a faster pace than reported in previous quarters, helped by quicker delivery times and the expanded merchandise assortment.
“The holidays are off to a strong start at Costco,” Benedict said.