Costco Wholesale just reported June net sales of $29.24 billion, an impressive 10.6% year-over-year (YOY) increase for the five-week retail period ended July 5. Even better, the company said comparable sales for June jumped 8.8%. All of this included a 10% gain in the United States, a 3.7% jump in Canada, and a 4.7% increase in its international markets. In addition, e-commerce comparable sales were up nearly 21% for June.
Of course, the cornerstone of Costco's success remains its membership business model. Unlike other retailers, which rely on product margins, Costco generates a significant portion of its profits from recurring membership fees rather than from product sales. Costco purposefully operates on very low gross margins because the company is more concerned about driving in more net profit from higher-margin membership fees. What makes Costco even more attractive is its $1.47 per share quarterly dividend paid on May 1, with its next dividend payment scheduled for August 7 to shareholders of record as of July 24. Its dividend payout ratio is 27.18%.
Alphabet Is Up 94% and Meta Is Down 5%. Barchart Data Helps Pick the Best AI Dividend Stock to Buy Now.
Multiple Compression Is a Real Threat to Microsoft Stock, But Its Core Story Isn't Broken
BlackRock Just Achieved Record AUM. How to Play BLK Stock After Q2.
Markets move fast. Keep up by reading our FREE midday Barchart Brief newsletter for exclusive charts, analysis, and headlines.
Looking ahead to the second half of the year, Costco appears well positioned to continue outperforming much of the retail sector. Several potential catalysts remain in place. That includes continued membership growth and high renewal rates, strength in e-commerce, stable demand for grocery and essential products, the expansion of international warehouse locations, and continued success of Kirkland Signature products.
Fueling more excitement, Bernstein analyst Zhihan Ma said Costco is one of her top picks for the second half of the year. With a price target of $1,194, Ma said that while inflation continues to squeeze budgets, Costco finds a way to squeeze that into an advantage.
However, Ma isn't the only COST bull. Bank of America has a "Buy" rating, with a $1,200 price target; Goldman Sachs has a "Buy" rating with a $1,159 price target; JPMorgan has an "Overweight" rating with a $1,110 price target; Raymond James has an "Outperform" rating with a $1,100 price target. Citi has a "Neutral" rating with a $1,020 price target, and Truist has a "Hold" rating with a price target of $1,011 a share.
Source: Yahoo Finance Top News — This article was automatically imported from the source. Read full article at original source →
