Costco Crushes May Comp Sales Expectations, Analysts Impressed By Investing.com

By Senad Karaahmetovic

Costco (NASDAQ:) reported total comparable sales for May that easily topped the average analyst estimate.

The total comparable sales came in at +15.5% to crush the market estimate of +9.6%. The U.S. comparable sales excluding fuel and currencies were up 10.7%, again better than the estimate of +6.8%.

Telsey Advisory Group analyst Joseph Feldman is “impressed” by the May sales report.

“We believe Costco is executing well in a tough operating environment. The company should remain a share gainer, with its solid sales and high membership renewal rates (~116.6MM members). In FY23, Costco should continue to generate double-digit EPS growth, driven by an MSD comp, HSD membership fee income growth, healthy digital growth, and effective management of costs,” Feldman said in a client note.

Truist analyst Scot Ciccarelli said “strong” results show that the value proposition is increasingly important.

“Its superior value proposition continues to drive robust sales. In an increasingly difficult economic environment, we believe Costco’s extremely competitive pricing will allow the company to take further market share (while its higher-income consumer base helps insulate it against a broader economic slowdown). Further, as we have recently written about, elevated gas prices continue to serve as a material driver of total comps, with a positive 620bps impact during the month (compared to +500bps in April),” Ciccarelli told clients.