DIpil Das
[caption id="attachment_90162" align="aligncenter" width="720"]
Source: Company reports/StreetAccount[/caption]
Costco Comps Below Consensus; E-Commerce Comparable Sales Growth Accelerates
Source: Company reports/StreetAccount[/caption]
Costco Comps Below Consensus; E-Commerce Comparable Sales Growth Accelerates
- In May, Costco grew same-store sales 4.2% year over year, slightly slower than the 5.4% growth in April and 40 basis points below the consensus estimate recorded by StreetAccount. Ex fuel, global comps were up 4.3% in May.
- Costco’s e-commerce comparable sales growth was 20.2% in May, slower than April’s 23.6% growth.
- Ex fuel, Costco US comps were up 4.4% in May. The retailer’s strongest results in the US were in the Midwest, Los Angeles and San Diego. In terms of international performance, Spain, Mexico and Taiwan posted the strongest results.
- Currency fluctuations negatively impacted the company’s comps. Canada same-store sales growth was hurt by about 450 basis points, while other international comp growth was negatively impacted by approximately 380 basis points. Overall, group comparable sales were negatively impacted by 110 basis points.
- Cannibalization negatively impacted US comps by about 50 basis points, Canada by 80 basis points and other international segments by approximately 170 basis points. Overall, the company was negatively impacted by 75 basis points.
- Revenue recognition standard ASC 606 had a positive impact of approximately 110 basis points for the US and 90 basis points for the total company.
- In the merchandise segment, excluding currency effects, comps for food and sundries were positive mid-single digits; departments that showed strongest results were candy, sundries and liquor. Hardlines posted comps in the low- to mid-single digits; the departments with strong performance were toys, seasonal, majors and -brand toys. Softlines were up mid-single digits, the departments that showed strong performance were special order kiosks, home furnishings and domestics.
- Fresh food comparable sales were up low- to mid-single digits, with service, deli and meat being better-performing departments. In the ancillary businesses, hearing aids, gasoline and optical saw the strongest comp sales increases.
- Gasoline price inflation positively impacted total comps by 10 basis points: the overall average selling price increased to $3.16 per gallon this year compared to $3.13 a year earlier.
- Buckle’s comparable sales decreased 0.8% year over year in May, compared to a 2.0% increase in April. Net sales decreased 1.1% year over year, compared to a 1.7% increase in April.
- By business segment, total sales in men’s were up 0.5% year over year. The men’s segment accounted for approximately 51.5% of total sales in May 2019, but price points in the segment were down about 1.0%.
- Total sales in the women’s segment fell 1.5% year over year. The women’s segment accounted for 48.5% of total monthly sales in May 2019, and price points were down about 3.5%.
- By product type, accessories sales were down 1.0% year over year in May and accounted for 9.5% of total sales. Footwear sales grew 12.5% year over year and represented 8.0% of total sales. Average accessory price points were down about 13.5% and average footwear price points were down by about 2.5%.
- In May, units per transaction grew 2.5% and the average transaction value remained flat.
- Cato’s sales decreased 2.0% year over year to $76.1 million, compared to a 13.5% increase in April. Comparable sales increased 1.0% year over year in May, compared to a 16.0% increase in April.
- Cato noted that May same-store sales were in line with the company’s expectations and management remains optimistic for the year.
- As of June 1, 2019, the company operated 1,302 stores in 31 states, down from 1,351 stores in 33 states as of June 2, 2018.