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Costco stock flies to yearly high on comps run

The shares of Costco Wholesale (COST) touched a new yearly high of $218.20 on Thursday, with few analysts touting the impressive comps run made the warehouse club operator somewhat fearless in the tough retail scenario.

Analyst firm Zacks placed the stock favorably in 2018 helped by the company’s sound fundamentals. Meanwhile, Costco launched online groceries shopping and delivery in Southern Ontario, Canada.

Costco Wholesale Store Front
Picture Courtesy: Flickr.com

After launching an online shopping service in the US, Costco is preparing itself tough for the battle against Amazon (AMZN), Walmart (WMT) and Target (TGT). And the move of launching online grocery in Canada will help Costco to attract the consumers at large. Already Costco has been operating 99 warehouses in Canada, and online shopping is aimed at trial in Southern Ontario with an intention to cover the whole of Canada by year-end.

Zacks Investment Research believes that Costco remained one of the assertive retail wholesalers after considering the breadth and quality of merchandise offered. Costco has an advantage over other players with its robust comps performance, growth strategies and strong membership trends.

Costco has remained in the growth track with the help of its strategy to sell products at heavily discounted prices. Costco, which has a stellar comps show in 2018, benefited from the increasing disposable income, raised consumer sentiment and strengthening job market.

Zacks believes Costco seems rather strong to the challenging retail backdrop in the midst of sluggish store and mall traffic experienced by major chains. Online shopping remained the key to attracting the crowd, but Costco was able to attract consumers both through online and in stores as evidenced by the 9.7% increase in comps for June and the 36.8% jump in e-commerce comps for the third quarter.

Shares of Costco ended Thursday’s regular trading session up 1.20% at $217.54 on the Nasdaq. The stock, which has risen 17% for the year-to-date and 44% for the past year, had been trading between $150 and $218.20 for the past 52 weeks.

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