Costco Wholesale Corporation Reports December Sales Results

Rhea-AI Summary

Costco Wholesale Corporation (Nasdaq: COST) reported net sales of $26.15 billion for the retail month of December 2023, an increase of 9.9% from the previous year. For the seventeen weeks ended December 31, 2023, net sales were $82.86 billion, a 5.9% increase from the same period in 2022. Comparable sales for the period showed positive growth in the U.S., Canada, and other international markets, with e-commerce sales also experiencing significant increases. Costco currently operates 871 warehouses across multiple countries and also has a strong e-commerce presence.

Insights

Market Research Analyst

Costco's reported net sales of $26.15 billion for December, marking a 9.9% increase year-over-year, signify a robust consumer spending environment despite potential macroeconomic headwinds. The expansion in sales volume is indicative of Costco's strong market position and its ability to attract and retain members. The 5.9% growth in net sales for the seventeen-week period, although slightly lower, remains impressive given the fiscal calendar shift impact.

The notable 17.7% and 10.2% growth in e-commerce for the five and seventeen-week periods, respectively, underscores the ongoing shift in consumer behavior towards online shopping and Costco's effective adaptation to this trend. The company's omnichannel strategy is proving to be effective and its continued investment in e-commerce infrastructure is likely to yield long-term benefits.

Costco's ability to maintain positive comparable sales growth across all regions, with particularly strong performances in Canada and Other International segments, demonstrates its international appeal and the scalability of its business model. The 3% benefit from the additional shopping day in December is a one-off factor, but it emphasizes the importance of retail calendar nuances on performance metrics.

Financial Analyst

The reported increase in net sales for Costco reflects positively on its stock valuation prospects, as revenue growth is a critical driver for investor sentiment. The company's consistent performance, even with calendar shifts, suggests a strong underlying business model that can withstand external pressures. The reported figures could lead to upward revisions in earnings estimates and potentially influence stock price movements favorably in the short-term.

Investors should also consider the impact of the reported sales figures on Costco's operating margins and cash flows. The growth in e-commerce, while beneficial for top-line growth, may have different margin profiles compared to in-store sales. Additionally, the sustained investment in e-commerce capabilities could affect capital expenditure levels and thus free cash flow metrics, which are important for dividend and share repurchase considerations.

Economist

Costco's sales performance can be viewed as a microcosm of the broader retail sector and consumer confidence. The reported sales growth during a period of potential economic uncertainty may suggest that consumer spending, particularly in bulk retail segments, remains resilient. This could be indicative of stable employment conditions and consumer confidence levels, which are key indicators for economic health.

The shift towards e-commerce also has broader economic implications, such as the demand for warehouse space, logistics and employment in these sectors. As Costco continues to expand its e-commerce footprint, it may contribute to growth in these ancillary areas, with potential multiplier effects on the economy.

Costco's international sales growth also reflects global economic trends, where the retail sector's performance can act as a proxy for middle-class expansion and spending power in various regions. This has implications for global trade dynamics and multinational retail strategies.

ISSAQUAH, Wash., Jan. 04, 2024 (GLOBE NEWSWIRE) -- Costco Wholesale Corporation (“Costco” or the “Company”) (Nasdaq: COST) today reported net sales of $26.15 billion for the retail month of December, the five weeks ended December 31, 2023 an increase of 9.9 percent from $23.80 billion last year.

For the seventeen weeks ended December 31, 2023, the Company reported net sales of $82.86 billion, an increase of 5.9 percent from $78.26 billion for the seventeen weeks of fiscal year 2023 ended December 25, 2022.

Net sales for the seventeen weeks were negatively impacted by approximately one-half to one percent from the shift of the fiscal calendar, as a result of the fifty-third week in fiscal year 2023.

Comparable sales for the periods ended December 31, 2023 were as follows:

	5 Weeks		17 Weeks
U.S.	7.3%		3.6%
Canada	12.8%		8.3%
Other International	10.5%		10.9%
Total Company	8.5%		5.2%
E-commerce	17.7%		10.2%

Comparable sales excluding the impacts from changes in gasoline prices and foreign exchange were as follows:

	5 Weeks		17 Weeks
U.S.	7.4%		4.1%
Canada	11.9%		9.3%
Other International	8.1%		7.4%
Total Company	8.1%		5.2%
E-commerce	17.4%		10.0%

This year’s retail month of December had one additional shopping day due to the timing of New Year’s Day. This benefited total and comparable sales by approximately three percent.

Additional discussion of these results is available in a recorded message. It can be accessed by dialing 1-833-348-4737 or by visiting investor.costco.com (click on “Events & Presentations”). This message will be available through 4:00 p.m. (PT) on Thursday, January 11, 2024.
        
Costco currently operates 871 warehouses, including 600 in the United States and Puerto Rico, 108 in Canada, 40 in Mexico, 33 in Japan, 29 in the United Kingdom, 18 in Korea, 15 in Australia, 14 in Taiwan, five in China, four in Spain, two in France, and one each in Iceland, New Zealand and Sweden. Costco also operates e-commerce sites in the U.S., Canada, the U.K., Mexico, Korea, Taiwan, Japan and Australia.

Certain statements contained in this document and the pre-recorded message constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For these purposes, forward-looking statements are statements that address activities, events, conditions or developments that the Company expects or anticipates may occur in the future. In some cases forward-looking statements can be identified because they contain words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “likely,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would,” or similar expressions and the negatives of those terms. Such forward-looking statements involve risks and uncertainties that may cause actual events, results or performance to differ materially from those indicated by such statements. These risks and uncertainties include, but are not limited to, domestic and international economic conditions, including exchange rates, inflation or deflation, the effects of competition and regulation, uncertainties in the financial markets, consumer and small business spending patterns and debt levels, breaches of security or privacy of member or business information, conditions affecting the acquisition, development, ownership or use of real estate, capital spending, actions of vendors, rising costs associated with employees (generally including health-care costs), energy and certain commodities, geopolitical conditions (including tariffs and the Ukraine conflict), the ability to maintain effective internal control over financial reporting, regulatory and other impacts related to climate change, public-health related factors, and other risks identified from time to time in the Company’s public statements and reports filed with the Securities and Exchange Commission. Forward-looking statements speak only as of the date they are made, and the Company does not undertake to update these statements, except as required by law. Comparable sales and comparable sales excluding impacts from changes in gasoline prices and foreign exchange are intended as supplemental information and are not a substitute for net sales presented in accordance with GAAP.        

CONTACTS:

Costco Wholesale Corporation Richard Galanti, 425/313-8203 David Sherwood, 425/313-8239 Josh Dahmen, 425/313-8254

COST-Sales 

FAQ

What were Costco Wholesale Corporation's net sales for the retail month of December 2023?

Costco Wholesale Corporation reported net sales of $26.15 billion for the retail month of December 2023.

What was the percentage increase in net sales for the seventeen weeks ended December 31, 2023 compared to the same period in 2022?

Net sales for the seventeen weeks ended December 31, 2023, were $82.86 billion, a 5.9% increase from the same period in 2022.

How many warehouses does Costco Wholesale Corporation currently operate?

Costco currently operates 871 warehouses across multiple countries.

In how many countries does Costco Wholesale Corporation operate its warehouses?

Costco operates warehouses in the United States, Puerto Rico, Canada, Mexico, Japan, the United Kingdom, Korea, Australia, Taiwan, China, Spain, France, Iceland, New Zealand, and Sweden.

In which countries does Costco Wholesale Corporation have e-commerce sites?

Costco operates e-commerce sites in the U.S., Canada, the U.K., Mexico, Korea, Taiwan, Japan, and Australia.