Why Costco’s monthly sales mistakes don’t change our view

Date:

Consumers shop at Costco, Miami, Florida, on September 28, 2021.

Joe Ladle | Getty Images

(This article was first sent to members of the CNBC Investing Club with Jim Cramer. To get real-time updates in your inbox, Subscribe here.. )

CostcoThe shares we own for charitable trusts reported sales in the November retail month after the closing bell on Wednesday night.

Remember, Costco’s reporting structure is different from most listed companies. In an era where quarterly reporting is commonplace, Costco stands out as one of the few companies to report monthly sales performance in addition to regular earnings reports. We appreciate this transparency because it keeps investors informed of the business situation.

Four-week net sales were $ 18.13 billion, up 15.7% year-on-year. Although strong results, same-store sales (also known as same-store sales, or comps) are indicators that we want to focus on because they provide the greatest insight into business trends.

  • Total comparable sales in November increased 14.1%, missing a 15% estimate.
  • Analyzing comparable sales helps your company understand whether it can attract more customers and sell more products.

In the Costco report, you’ll also notice a second measurement of comparable sales. Another comp excludes the effects of fluctuations in gasoline prices and forex. These are considered “core comps” because they remove the effects of items that are beyond the control of the company. I think Core Comp tells a better story.

  • During the period, Costco’s total core comps increased by 9.2%.
  • In the United States, core comps have increased by 9.1% and an estimate of 11.4% is missing. Meanwhile, Canada increased 7.6% and other internationals increased 11.3%.

Online sales growth slows E-commerce core comps have increased by 11.7%, but one thing to keep in mind is that the company remains difficult to compare to a year ago.

Conclusion: Costco recorded another strong monthly turnover, but unfortunately retailers broke more streak than expected. There was no doubt that a small mistake would be made at some point. We do this just because the expectations are a little too bullish.

Core Comp in November is still up about 9% company-wide, and there is no reason to change our claim that Costco is gaining new customers and gaining market share.

The CNBC Investing Club has become the official home of my charitable trust. It’s a place where you can see all the moves we make for our portfolio and get insights into my market faster than anyone else. Charitable Trust and my writing have nothing to do with Action Alerts Plus.

As a member of the CNBC Investment Club with Jim Cramer, you will receive trading alerts before Jim makes a deal. Jim typically waits 45 minutes after sending a trading alert before buying or selling shares in a charitable trust portfolio. If a trade alert is sent in front of the market, Jim will wait 5 minutes after the market opens before executing the trade. If a trading alert is issued less than 45 minutes on the trading date, Jim will execute the trading 5 minutes before the market closes. If Jim is talking about stocks on CNBCTV, he waits 72 hours after issuing a trading alert before executing the trading. Learn more about investment disclaimers..

(Jim Cramer’s Charitable Trust costs a lot.)

Why Costco’s monthly sales mistakes don’t change our view

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The post Why Costco’s monthly sales mistakes don’t change our view appeared first on Eminetra.

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