The strategy of selling products at discounted prices has helped players in the retail industry attract customers looking for value and convenience. Under the current circumstances, people from low to middle income groups have shown a preference for discount stores. In an effort to better compete with pure online retailers, industry players have strengthened the digital ecosystem as well as shipping and delivery capabilities.
Among a host of renowned stocks in the industry, we focus on Costco Wholesale Company COST. This Issaquah, Washington-based company has become a viable option for bargain hunters looking for basic necessities and other discretionary purchases. Costco is expected to benefit from its ability to attract traffic through strategic pricing and a robust membership model.
Here is a brief analysis
Costco continues to be one of the dominant warehouse retailers due to the breadth and quality of merchandise offered. Its growth strategies, better price management, decent membership trends, and increasing penetration of e-commerce business contributed to its optimistic performance. Cumulatively, these factors have helped achieve impressive sales figures.
The company’s net sales rose 16.9% to $ 18.92 billion for the month of retail June – the five-week period ended July 4, 2021 – from $ 16.18 billion in the year last. This follows an improvement of 24.2%, 33.5% and 17.6% during the months of May, April and March, respectively. Comparable sales for June jumped 14.1%, following increases of 22.8%, 32.5% and 16% respectively in May, April and March.
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Without a doubt, Costco quickly embraced the omnichannel mantra to deliver a seamless shopping experience, whether online or in stores. Note that comparable e-commerce sales jumped 20.8% during the month of June. The metric had increased by 12.1%, 20.5% and 57.7% during the months of May, April and March, respectively. Costco operates e-commerce sites in the United States, Canada, United Kingdom, Mexico, Korea, Taiwan, Japan, and Australia.
Costco’s Acquisition of Innovel Solutions, a Leading Provider of Third-Party End-to-End Logistics Solutions Now Known as Costco Logistics, Boosts E-Commerce Capabilities and Helps Sell ‘Big and Bulky’ Items .
Price return
The “all-season equity” label suits Costco because the company has withstood several market gyrations and has consistently delivered returns for investors. This member warehouse operator has posted a decent run on the exchanges over the past three months. Through its operational initiatives, focused on customer expansion, cost optimization and strategic investments, the inventory has overtaken the industry and the retail and wholesale sector. During the said period, shares of Costco were up about 12.6% compared to the industry’s growth of 8.2%. Meanwhile, the sector rose 0.1%.
Final result
Costco’s business model and commitment to opening member-only warehouses will continue to generate traffic and therefore revenue. Zacks’ consensus estimate for this company’s current year sales and earnings Zacks Rank # 2 (Buy) suggests growth of 15.8% and 18%, respectively, over the period of l ‘last year.
3 most notable stocks in the industry
Target TGT shows a long-term profit growth rate of 13.3%. He currently has a Zacks Rank # 1 (strong buy). You can see The full list of today’s Zacks # 1 Rank stocks here.
General dollar DG shows a long-term profit growth rate of 11.3%. He currently wears a Zacks Rank # 1.
Burlington Stores BURL has a surprise profit for the last four quarters of 74.7%, on average. The stock sports a Zacks Rank # 1.
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Target Corporation (TGT): Free share analysis report
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Costco Wholesale Corporation (COST): Free Inventory Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
