Costco Posts 6.8% Sales Growth in May, Slightly Slower Than April
Costco reported a 6.8% increase in sales for the month of May compared to May 2024.
Comparable store sales rose less than analysts had expected, according to a note from JPMorgan analysts.
The analysts said cooler than average weather in May could have slowed sales, while purchases rushed by tariffs likely peaked in March and April.Costco Wholesale (COST) after the bell Wednesday said that its sales in May grew 6.8% year-over-year to $20.97 billion, slightly slower growth than the 7% that it saw in April compared to April 2024.
The warehouse retailer's comparable store sales rose 4.1% in the U.S., 4.3% for the total company, and online sales grew 11.6% in May. The 5.5% comparable sales increase in the U.S., when excluding the impact of gas prices and foreign exchange rates, came in below the 6.4% analyst consensus, JPMorgan analysts wrote following the sales report.
The analysts wrote that Costco's sales results are in line with some other retailers that mentioned in recent earnings reports that May sales were weaker than April or March, largely due to weather—including a cooler-than-normal Memorial Day weekend in parts of the country. Costco said it doesn't typically cite weather as a factor unless there is an extreme weather event, per the analysts.
Any big purchases that consumers made ahead of schedule because of fears that tariffs would raise prices likely peaked in March and April, as executives said in last week's earnings call that they were seeing few tariff-motivated purchases at this point, according to the JPM analysts.
The analysts said Costco's comparable sales growth could be pressured in the next few months as Costco laps the popular sales of its gold bars, which frequently sold out quickly when they were available. The retailer narrowly beat estimates in its fiscal third-quarter report, as other analysts have said Costco is well-positioned to navigate the tariff environment.
Costco shares were little changed shortly ahead of markets opening, and are up nearly 15% since the start of the year but still just below record levels set in February.
Read the original article on Investopedia
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
34 minutes ago
- Yahoo
2 Reasons AMC Stock Is Soaring in June
Memorial Day weekend set moviegoing records, and a lot of the sales went to AMC as the largest theater chain. With many expected hit movies slated for release, management thinks it's turned a corner. AMC stock is still down year to date and the company has a lot to prove. 10 stocks we like better than AMC Entertainment › AMC (NYSE: AMC) is the largest movie theater operator in the world, but being the leader in a troubled industry hasn't done much for the company over the past few years. With the advent of streaming and residual fears from the pandemic, moviegoing just isn't what it once was and AMC continues to struggle. However, Memorial Day weekend was a boon for the company and AMC stock has been climbing. Let's see why and what it means for the future. Streaming from home has taken a toll on the box office, but there is still life left in theaters. Four of the top 10 highest-grossing films ever were released since the pandemic started, including Avatar: The Way of Water in the No. 3 spot and last year's Inside Out 2. People are still going to the movies. That fact was reinforced with a record Memorial Day weekend in May. Disney's live-action remake of Lilo & Stitch had the highest-ever four-day Memorial Day opening, and it was buttressed by a strong showing for Paramount's Mission: Impossible -- The Final Reckoning. Altogether, these two topped a blowout weekend with $326.7 million in domestic ticket sales, and Lilo & Stitch is already the second-highest-grossing domestic film of the year. Of course, that success trickled down to generate incredible financial results for AMC. Management said it set an all-time record for admissions revenue, food and beverage revenue, and total revenue for a weekend Memorial Day opening, and that the five-day stretch was the third-highest revenue for any five-day slot in more than 10 years. As for attendance, this was the highest-attended weekend and highest-attended five-day period of the year, both domestically and globally. Management didn't provide specific financial metrics for the weekend, so investors aren't likely to hear the nitty-gritty details until the second-quarter earnings release sometime in July or August. But management's update and optimism are boosting investor confidence. It's nice for the company to have a solid, record-breaking opening, but can it last? Management thinks so, and the market may be pricing that in. CEO Adam Aron said that after this weekend, AMC has turned a corner. "With many more potentially huge movies coming in June all the way through the end of 2025, and beyond that deeply into 2026 as well," he said, "we firmly expect to be enjoying a robust theatrical box office as we look ahead." Here's what to be excited about. Disney has a full slate of films coming out over the next few years, including the third film in the Avatar series. The first two are the highest-grossing and third-highest-grossing films ever, and the next film is slated for release this coming December. It also has the next Frozen film and other top franchises coming out soon. Warner Bros. has its own expected hits coming out, including a new Superman, and Comcast's Universal Studios has the next installment of Wicked and a new Shrek. Sequels to popular franchises can be big business. But the company is still reporting revenue declines and losses as of the 2025 first quarter. It will take some time to see if AMC has indeed turned a corner. As the price has increased in June, so has the short interest in AMC, hitting almost 15% of all outstanding shares. These investors are betting on this being a short-term boost and that the price will fall from this surge. Even though AMC stock is up 29% over the past month, it's still down 15% year-to-date. Unless the company releases incredibly strong earnings for the second quarter and keeps up its performance, the price jump may not last. Part of what's frustrating about that for investors is that many variables are beyond the company's control. It's up to film producers to create hit movies that bring viewers into theaters and to make the decision to keep them there long enough before they hit streaming services. That can be quite lumpy. You need to have real confidence in the future of the film industry and the resilience of theaters as a beckoning call for die-hard fans to want to invest in AMC's future, and for most investors, that time isn't now. Before you buy stock in AMC Entertainment, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and AMC Entertainment wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $674,395!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $858,011!* Now, it's worth noting Stock Advisor's total average return is 997% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Jennifer Saibil has positions in Walt Disney. The Motley Fool has positions in and recommends Walt Disney. The Motley Fool recommends Comcast. The Motley Fool has a disclosure policy. 2 Reasons AMC Stock Is Soaring in June was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
2 hours ago
- Yahoo
The week in stocks: Lululemon gets stretched and is Tesla a TACO trade candidate?
Every weekend, the Financial Post breaks down the most interesting developments in this week's world of investing, from top performers to surprising analyst calls and stocks you should have on your radar. Here's this week's edition. Shares of Lululemon Athletica Inc. (LULU) fell nearly 20 per cent on Friday to close the week at US$265.27. The maker of fashionable workout gear and leisure clothing, which reported earnings on Thursday, said that sales fell in its Americas market in the first quarter and that it is already seeing lower traffic, especially in the United States as tariffs rattle price-conscious consumers. The company issued worsening guidance for the second quarter projecting sales and profit below analyst estimates and trimming its earning outlook for the year and also warned it would have to raise prices. Besides the tariff headwinds, the Vancouver-based athleisure company is also facing more competition and shifting fashion trends. A report from Veritas Investment Research last month had warned that Lululemon was exposed to the trade war on a few fronts, with 50 to 60 per cent of its sales coming from the U.S. and most of its manufacturing happening overseas. Following the earnings release, analysts at Deutsche Bank, Jeffries and Co., and JPMorgan Chase & Co., were among those who cuts their price targets for the company. Can Canada's premier stock market keep its hot streak going? That's the question prominent Bay Street economist David Rosenberg asked and answered in a note out this week. The S&P/TSX composite has been on a tear outpacing the S&P 500 by 12 percentage points over the last year. From June 2024, when Rosenberg noted 'the fortunes of the two indices began to diverge,' the TSX has risen 22.1 per cent compared to a 10 per cent gain for the S&P 500, in local currency, though the latter is ahead on a U.S. dollar basis. On the way to these gains, the TSX also hit a fresh record close above the 26,000 threshold on May 26. 'Victory laps aside, what matters most to investors at this time is where we see the outlook from here,' Rosenberg wrote. He thinks the conditions are in place for the TSX to keep rising, albeit at a slower pace. Among his reasons, Bank of Canada interest rate policy is more accommodative than U.S. monetary policy and with more cuts expected in the second half of the year that means more liquidity. 'Relative stability is being rewarded in Canada,' Rosenberg said as the outlook for earnings per share growth has held up while in the U.S. it's been scaled back. The so-called TACO trade — Trump Always Chickens Out — turned the United States president into a stock market punchline in recent weeks. Coined by Rob Armstrong, the Financial Times' U.S. market columnist, the term refers to the the president's track record of backpedalling, especially on tariffs, and suggests investors would be wise to fade the chaos that has followed Trump's more disruptive policy announcements. But will the theory apply to his personal feuds, too? That's a question Tesla Inc. (TSLA) shareholders might be asking after a social media punchfest erupted between the President and Elon Musk that left Tesla shares battered and bruised. After falling almost 15 per cent on Thursday, Tesla ended the week as the worst performing stock on the S&P 500, down 13.9 per cent, according to Bloomberg. While there were signs of de-escalation Friday, betting on a TACO-style reversal may still be high risk. 'Sell in May and go away,' is pithy investing advice that has been repeated for decades. But technical analysts at CIBC Capital Markets said investors were wise to pay no heed this year. 'The catchy phrase may have a nice rhyme, but May has been positive in the past five years with better follow-through in July,' analyst Sid Mokhtari and associate Michael Petipas wrote in a note this week. Mokhtari and Petipas have been assembling a Top 10 picks list for the better part of the past 15 years based on historical seasonal analysis. They said June 'still skewed a bit positive though slightly neutral' but that they are expecting more positive momentum for returns in July. Here are their top 10 picks for June based on expected total returns over the next four to six weeks, or possibly as far out as three months: Power Corp. (POW) Sun Life Financial Inc. (SLF) Exchange Income Corp. (EIF) MDA Space Ltd. (MDA) Eldorado Gold Corp. (ELD) NGEX Minerals Ltd. (NGEX) Artizia Inc. (ATZ) Parkland Corp. (PKI) Shopify Inc. (SHOP) Killam Apartment Real Estate Investment Trust (KMP-U) What is the bond market and why is everybody so worried about it? 5 ways the investment industry will change with AI Their top-10 ideas for May returned 4.5 per cent compared with a year to date return on the S&P/TSX composite index of 5.9 per cent, they said. • Email: gmvsuhanic@
Yahoo
3 hours ago
- Yahoo
Should You Invest $1,000 in TGT today?
Target has struggled to meet the needs of cost-conscious customers. A turnaround could take several years to fully materialize. The retail giant's dividend is still ultra-safe. 10 stocks we like better than Target › Target (NYSE: TGT) is a passive income powerhouse with more than five decades of annual dividend raises and an enticing 4.8% yield. But even with the high payout, Target has lost investors money over the last five years while the S&P 500 (SNPINDEX: ^GSPC) has more than doubled with dividends included. Here's why Target is under pressure, and whether the dividend stock is a buy right now. Retailers like Target have been under pressure as consumers tighten spending amid inflation and economic uncertainty. Data from the University of Michigan shows that consumer sentiment is hovering around its lowest level since 2022. Some companies have capitalized on consumer needs by providing products and services consumers want at affordable prices. For example, Walmart and Costco Wholesale have steadily grown revenue while sustaining good margins despite macro challenges. Target has had some success with promotions and partnerships, but is still seeing an overall decline in foot traffic. The divergence between Target's stock price and Walmart's and Costco's over the last two to three years illustrates the degree to which investor confidence has weakened for Target relative to these other names. Target slashed its guidance in its most recent earnings announcement. The company is now on track for a third consecutive fiscal year of adjusted earnings-per-share (EPS) declines. With Target's sales and earnings falling, investors have understandably grown skeptical of the company's ability to execute. Target has built up a bad track record of overpromising and underdelivering, so it's hard to put too much faith in its guidance. To Target's credit, management acknowledged the poor results and is focusing on turning the business around rather than appeasing investors. The company plans to leverage efficiency improvements and a revamped product lineup to get customers in stores and return to meaningful sales growth. Target has the tools to pull it off, but the retailer has to manage costs better, align inventory with buyer behavior trends, and limit steep discounts that have crushed its margins in recent years. Target's flaws are glaring and ongoing, but it would be a mistake to overlook the qualities that could make the stock a good buy in June. Target's sales and earnings may be ticking down, but it is still a highly profitable business that generates cash flow. In fact, Target's EPS and free cash flow (FCF) per share remain significantly higher than its dividend per share, even though Target has raised its dividend for 53 consecutive years. Typically, when a company's stock price tanks and its dividend yield goes up, it's because earnings are declining and the dividend begins to look unaffordable. However, Target is in a unique situation where its dividend is highly affordable despite the stock price being around six-year lows and the yield ballooning. Another good way of measuring dividend affordability is comparing the FCF yield to the dividend yield. FCF yield takes FCF per share and divides it by the stock price, similar to how dividend yield is dividend per share divided by the stock price. FCF yield basically shows the theoretical dividend a company could pay if it used all of its FCF on dividends. Target's FCF yield is a sky-high 8.2% -- much more than its 4.8% dividend yield. So while the company isn't growing, it is still a very profitable business that is well positioned to grow its dividend. Investing $1,000 in Target demonstrates a belief in management's ability to turn the company around and leverage Target's strengths rather than expose its weaknesses. The company's main weakness is that it can't compete with Walmart, Costco, or Amazon in terms of price, but it can find a happy medium centered around an enjoyable customer experience at a good value. The Target Circle loyalty program and Target's exclusive and limited-time partnerships will be instrumental in pulling off the turnaround. In the meantime, investors can rest easy knowing that the dividend is affordable, even with the high yield. A $1,000 investment in Target would produce about $48 in dividend income per year, which is significantly more than the $13 or so you could expect from an S&P 500 index fund. Add it all up, and Target stands out as a solid buy for value and income investors today. Before you buy stock in Target, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Target wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $668,538!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $869,841!* Now, it's worth noting Stock Advisor's total average return is 789% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Daniel Foelber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Costco Wholesale, Target, and Walmart. The Motley Fool has a disclosure policy. Should You Invest $1,000 in TGT today? was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
