Costco's Strong September Sales Signal Continued Market Dominance

Sales Performance - Comparable sales in the United States grew 6.5%, Canada 5.7%, and Other International markets 8.5% for the five weeks ended Oct 6 [2] - Total company comparable sales rose 6.7% in September, following consecutive increases of 5% and 5.2% in August and July [2] - September's total and comparable retail sales saw a boost of about 2% in the United States and 1.5% globally, driven by solid consumer demand in the final week of the month [2] - Excluding gasoline prices and foreign exchange rates, comparable sales in the United States rose 9.3%, Canada 6.3%, and Other International markets 9.6% [3] - Total comparable sales, excluding external factors, increased 8.9% in September [3] - E-commerce comparable sales surged 22.9%, with the same rate excluding gasoline prices and foreign exchange impacts [3] - Net sales for September increased 9% to $24.62 billion, up from$22.59 billion in the same period last year [4] Membership Model - Costco's membership-based business model drives customer loyalty, with renewal rates above 90% [5] - Membership fees were raised effective Sept 1, with Gold Star, Business, and Business add-on memberships now costing $65 annually, a$5 increase [6] - Executive Memberships increased from $120 to$130, with the maximum annual 2% Reward boosted from $1,000 to$1,250 [6] Growth Prospects - Strategic investments in technology, logistics, and product offerings support Costco's growth prospects [7] - The company's emphasis on bulk sales and efficient inventory management allows it to keep prices low, making it a preferred shopping destination for budget-conscious consumers [7] - Shares of Costco have advanced 23.8% in the past six months, outperforming the Retail – Discount Stores industry's rise of 13.1% [7] Other Retail Picks - Ollie's Bargain (OLLI) carries a Zacks Rank 2, with a trailing four-quarter earnings surprise of 7.9% on average [8] - The Zacks Consensus Estimate for Ollie's Bargain's current financial-year sales and earnings implies growth of 8.8% and 12.7%, respectively [8] - The Kroger Co (KR) carries a Zacks Rank 2, with a trailing four-quarter earnings surprise of nearly 8.2% on average [8] - The Zacks Consensus Estimate for Kroger's current quarter's sales and earnings indicates growth of 1% and 3.2%, respectively [8] - Flowers Foods (FLO) carries a Zacks Rank 2, with an earnings surprise of 1.9% in the last reported quarter [9] - The Zacks Consensus Estimate for Flowers Foods' current financial year's sales and earnings implies growth of 1% and 5%, respectively [9]