Shares of Costco (NASDAQ:COST) are up 1.3% in pre-open Thursday after the company reported total comparable sales for March that beat the average analyst estimate.
Total comparable sales came in at +17.2% to crush the estimate of +11.2%. U.S. comparable sales, excluding fuel and currencies, were reported at +12.7%, better than the estimate of +9.2%. For the five weeks to April 3, net sales rose 19% Y/Y to $21.5 billion.
Stifel analyst Mark Astrachan reiterated his view that COST is a best-in-class retailer, with continued reinvestment appropriate to sustain outperformance of peers.
"We anticipate the company will continue to invest in price and e-commerce to reinforce its value proposition, which we view as key to sustaining favorable comp and traffic trends and continued outperformance of peers. Amid an inflationary backdrop, Costco has effectively balanced sales growth and profit in recent quarters with reinvestment. We anticipate this trend will continue, driving high single-digit operating income growth over the next 2-3 years," Astrachan said in a client note.
UBS analyst Michael Lasser is also positive on COST and sees more upside for shares.
"We think Costco is taking the right steps to remain relevant in a post-pandemic world. Plus, heightened pressure on the consumer could drive another leg of growth in both membership and retail spending. We don't think the co's shares fully reflect these tailwinds," Lasser wrote.
Cost stock price closed at $584.79 yesterday.
By Senad Karaahmetovic