July 8, 2016
Better-than-expected June sales generated heavy trading volume of Issaquah, WA-based Costco Wholesale stocks, pushing the share price up 4.72% on Thursday. Total sales increased 3% to $11.33 billion in June, up from $11.03 billion a year ago.
That sales recovery was a promising sign after May sales were flat. Analysts at UBS say June’s performance warrants “a premium valuation.”
The membership-only warehouse club is transitioning from American Express loyalty credit cards to Visa. Once completed, the new private-label cards are expected to drive sales and membership because customers can take advantage of a more attractive reward structure.
Analysts forecast 4% core U.S. comp growth in July, matching Costco’s highest since November 2015. A primary factor fueling growth is that the retailer is insulated from Amazon.com, since two thirds of total sales come from grocery and gas.