Costco (COST) unveiled robust sales data for March, beating analyst predictions and with its standout performance, earning a nod from JPMorgan analysts as a "clear market leader". Recording net sales worth $25.51 billion for the five-week period extending up to April 6, the retail giant witnessed a year-over-year (YoY) surge of over 8% - notably higher than the 6.8% growth expected by analysts. U.S. comparable sales also showed significant progress, rising over 7% above projections, while the e-commerce segment flourished with a 16% jump. Rapid growth in cooler, frozen, and candy departments guided food and sundries to witness high-single-digit growth.
Costco's consistent momentum on a global scale-resulting in market share wins all over the globe-was lauded by JPMorgan. As the investment bank underscored, "No other major retailer has succeeded in every country it entered." Maintaining its "overweight" rating for Costco and a price target of $1,070-indicating nearly an 11% upside from the Wednesday close of $965.19-the shares remained practically unaltered as tariff-instigated volatility rocked the wider market.
UBS analysts from the previous week voiced their opinion on Costco, along with Walmart (WMT), stating both retailers were likely well-equipped to counteract the repercussions of tariffs. With retailers reacting to import taxes by marking up prices, UBS analysts hinted that consumers would be less inclined to reduce spending on essential groceries. This makes large-scale retailers like Costco ideally positioned to negotiate better deals from vendors, while ensuring competitive pricing for consumers.